Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 105.899 | EURUSD 1.23016 | AUDUSD 0.7661 | NZDUSD 0.72137 | USDCAD 1.2913 | USDCHF 0.95533 | GBPUSD 1.40436 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.23118 | 1.22923

USDJPY                 106.039 | 105.694

GBPUSD               1.40619 | 1.4046

USDCHF               0.95574 | 0.95482

AUDUSD              0.76939 | 0.76523

USDCAD               1.29238 | 1.2885

NZDUSD               0.72289 | 0.71952

EURCHF                1.17588 | 1.17406

EURGBP               0.87570 | 0.87504

EURJPY                 130.445 | 130.004

For today

• EUR: A quiet session with the market drifting around the 1.2300 levels through too deep in the session before testing quietly through the 1.2310 areas from the lows from 1.2290 area. Congestion through the 1.2340 levels with possible weak stops on a push through the 1.2360 areas however, offers are likely to quickly appear on any test to the 1.2380 areas and slow the market on a move through the 1.2400 areas with offers likely to increase to the 1.2420 areas, and repeat, with congestion through the 1.2440-60 levels likely to be a little bit stronger and 1.2500 becoming a target with strong offers leading into the level. Downside bids light through to the 1.2280 levels with some bids protecting weak stops and the market vulnerable to a push to the stronger congestion into 1.2240 levels, a break here will see the 1.2200 level opening to a test however, good congestive bids on a move through the figure level and likely to be well supported through to the March lows.
• GBP: Very quiet with the market trading around the 1.4050 level through the early part of the session, holding the low opening and testing through to the 1.4060 levels before settling into a quiet range to the grey hour, bids into the 1.4000 level and light congestion possible with stronger bids likely to be centred around the 1.3950 level, a break through this level will likely see some stops and the market then looking to test the 1.2900 level and possibly stronger bids. Topside offers likely to be weak until the 1.4100 areas with some limited offers through to the 1.4115 before stops appear and the market able to push quickly to the 1.4150 level and further congestive offers with stronger offers likely on any approach to the 1.4200 area.
• JPY: A slow drift from the 105.90 areas to test the 105.70 areas into early Tokyo before starting a slow recovery and a push towards the 106.00 levels into the grey hour, downside bids into the 105.50 areas likely to be congestive more than supportive and a push through the level will see stronger bids into the 105.00-104.60 areas with the 104.50 likely to have some option barriers in play, a dip through the level will likely open the chance for another step lower through to the stronger 103.50 areas but could be a lot of work involved. Topside offers light through to the 106.50 areas with some light congestion in the area and stronger offers above into the 107.00 level, a break through the 107.20 level could see weak stops appearing and a run at the 107.50 level and stronger congestion possible.
• AUD: Dare I say the mover of the day, with RBA announcement dominating the trading and early dip through towards the 0.7650 level then reversed into the Tokyo session to push steadily to the 0.7690 areas with a tiny spike after the announcement before holding quietly in the mid 0.7680’s through to the grey hours, downside bids into the 0.7640 levels with light congestion and limited stops running to the 76 cent levels, still plenty of interest likely through the downside and the 75 cent handle likely to continue to slow any movement lower as the market moves deeper into the ranges from 2016-17, topside offers light through to the 77 cent level with some congestive offers through the level and weak stops likely to appear however, as with the move lower it took time to break the level and that is possibly likely to happen on the return trip.

Overnight News

USD:

Trump is said to push for tentative NAFTA deal, Peso strengthens

Trump to nominate ex-banker Muzinich to top Treasury role – UKT

Global:

Global money supply flashes surprise slowdown warning

EUR:

Euro surged last year but Central Banks didn’t bite

EU warns UK banks not to rely on Brexit transition deal – Times

IMF:

IMF releases data on currency composition of foreign exchange reserves

GBP:

Thousands of UK bank jobs at risk after Brexit warning Times

AUD:

Clayton Utz, Australian tax reforms to stapled structures to affect foreign investors

RBA: Low rates continuing to support Australian economy

RBA: leaves cash rate target unchanged

RBA: unchanged policy consistent with meeting CPI target over time

RBA: sees inflation picking up gradually as economy strengthens

RBA: a rise in Oz may see slower pickup in inflation, economy

RBA: Central forecast remains for faster growth in 2018

RBA: Higher US short term rates flowed through to Australia

RBA: Commodity export prices fallen recently, remain in past range

CNY:

Chinese ambassador to US says China will fight back any new US tariffs

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

AUD       AiG Performance of Manufacturing Index Mar A 63.1 | P 57.5

JPY         Monetary Base Y/Y Mar A 9.10% | C 9.60% | P 9.40%

AUD       RBA Rate Decision A 1.50% | C 1.50% | P 1.50%

06:00     EUR        German Retail Sales M/M Feb C 0.70% | P -0.70%

07:15     CHF        Retail Sales Real Y/Y Feb C -0.70% | P -1.40%

07:30     CHF        PMI Manufacturing Mar C 64.3 | P 65.5

07:45     EUR        Italy Manufacturing PMI Mar C 55.5 | P 56.8

07:50     EUR        France Manufacturing PMI Mar (F) C 53.6 | P 53.6

07:55     EUR        Germany Manufacturing PMI Mar (F) C 58.4 | P 58.4

08:00     EUR        Eurozone Manufacturing PMI Mar (F) C 56.6 | P 56.6

08:30     GBP       PMI Manufacturing Mar C 54.7 | P 55.2

 

Harry Hindsight

• EUR: Limited action with much of the market closed still for the Easter period across Europe as well as antipodeans, Opening around the 1.2320 areas the market drifted through the early part of the session to test to the 1.2310 areas before regaining the highs to the 1.2325 areas, the move into the London session saw the market drifting again and slipping through to the same lows, a steady rise through into the NYK session, pushing through to the 1.2345 level before dropping off as the numbers were released with some of the numbers missing there targets but early USD rallies helping the Euro to the 1.2280 areas before holding and pushing through to the 1.2290 levels, the market then rallied through to the close holding the 1.2300 areas in quiet trading.
• GBP: Cable slowly rose through the early part of the session and pushed through to the 1.4055 areas from the 1.4030 area opening, the move through to London saw the market giving up the gains before London came in buying in another slow push to the 1.4070 levels in limited action, NYK took the market higher through to make the highs just below the 1.4080 levels before seeing the same USD buying and the GBP falling back to the opening levels before recovering a little into the closing period.
• JPY: Opening a little lower from Friday’s close the market rose through to the 106.40 areas and then ranging through quietly into the NYK session where the market saw the highs for the day around 106.45 and then drifted off late into the session on limited volume to the 105.65 levels recovering only slightly into the 105.95 level and limited through to the close.
• AUD: Starting the day around the 0.7695 areas the market drifted a little before testing towards the opening highs again and finally settling into a slow drift through into the London session, London managed to push to the 0.7690 areas and ranging back to the 0.7680 levels before NYK came in selling and the market pushed gradually through to the 0.7650 area for a slow range to the close.

Yesterday’s premiership results

JPY         Tankan Large Manufacturing Index Q1 A 24 | C 25 | P 25 | R 26

JPY         Tankan Large Manufacturers Outlook Q1 A 20 | C 22 | P 19 | R 21

JPY         Tankan Large Non-Manufacturing Index Q1 A 23 | C 24 | P 23 | R 25

JPY         Tankan Non-Manufacturing Outlook Q1 A 20 | C 21 | P 20

JPY         Tankan Small Manufacturing Index Q1 A 15 | C 14 | P 15

JPY         Tankan Small Manufacturing Outlook Q1 A 12 | C 10 | P 11

JPY         Tankan Small Non-Manufacturing Index Q1 A 10 | C 8 | P 9

JPY         Tankan Small Non-Manufacturing Outlook Q1 A 5 | C 5 | P 5

JPY         Tankan Large All Industry Capex Q1 A 2.30% | C 1.00% | P 7.40% | R 6.40%

JPY         PMI Manufacturing Mar (F) A 53.1 | C 53.2 | P 53.2

AUD       TD Securities Inflation M/M Mar A 0.10% | P -0.10%

CNY        Caixin PMI Manufacturing Mar A 51 | C 51.7 | P 51.6

CAD       Manufacturing PMI Mar A 55.7 | P 55.6

USD       Manufacturing PMI Mar (F) A 55.6 | C 55.7 | P 55.7

USD       Construction Spending M/M Feb A 0.10% | C 0.40% | P 0.00%

USD       ISM Manufacturing Mar A 59.3 | C 60 | P 60.8

USD       ISM Prices Paid Mar A 78.1 | C 72.5 | P 74.2

USD       ISM Employment Mar A 57.3 | P 59.7

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