Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 106.61 | EURUSD 1.22693 | AUDUSD 0.76844 | NZDUSD 0.72602 | USDCAD 1.28068 | USDCHF 0.9587 | GBPUSD 1.40591 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.22873 | 1.22687

USDJPY                 106.596 | 106.427

GBPUSD               1.40966 | 1.40589

USDCHF               0.95899 | 0.95756

AUDUSD              0.77172 | 0.76798

USDCAD               1.28089 | 1.2775

NZDUSD               0.72957 | 0.7256

EURCHF                1.17678 | 1.17604

EURGBP               0.87287 | 0.87153

EURJPY                 130.855 | 130.638

For today

• EUR: A slow rise through the Asian session for the Euro moving off the 1.2270 levels to test eventually above the 1.2285 areas before trading sideways through into the grey hour around the 1.2280 level, Downside bids 1.2260-40 is likely to slow the market with a push through the level likely to see some weak stops appearing and a possible push to the limited 1.2200 areas, a push through will likely see congestive bids appearing through the 1.2180 level however, possible weak stops could push the market towards the stronger 1.2150 area, Topside offers light through the 1.2300 with limited congestion with weak stops not likely until pushing through the 1.2340 level and opening up a fresh grind towards the 1.2400 areas and stronger offers.
• GBP: Cable moved quietly into the Tokyo session pushing to the 1.4070 levels before testing quickly to the 1.4080 in the early part of the morning, the market held the level for a short period however, emerging markets (EM) suffered through the session and the USD subdued a little by the building trade wars saw the Cable again push for the 1.4100 level not quiet making it and drifting off from the highs into the grey hour, Topside offers into the 1.4100 level are weak now and a move through the 1.4115 areas will likely see weak stops appearing and the market running towards the congested 1.4150 sentimental level, with that congestion likely to continue in one form or another until increasing in size into the 1.4200 levels and possible weak stops, topside offers are likely to continue though and will likely need a few pushes before giving ground to the 1.4250 area. Downside bids into the 1.4000 area likely to be a little stronger than Monday however, a move through the level will still see some congestion continuing through to the stronger 1.3950 level with limited stops on any push through.
• JPY: USDJPY drifted off from the opening around the 106.65 levels and tested through into the Tokyo session pushing towards the 106.40 before finding some limited support, the market then traded around the 106.50 levels through to the grey hours unable to challenge either direction, Topside limited congestion through to the stronger offers into and through the 107.00 areas, possible weak stops on a push through the 107.20 but will likely need some impetus to get there before stronger offers again appear as the market pushes for the 107.50 area. Downside bids light back through the 106.00 level with weak stops possibly limited however stronger bids then start to appear on any push towards the 105.50 areas and through the level opens up a renewed challenge of the 105.00 areas.
• AUD: Opening around the 0.7680 levels the market held that level through into the Tokyo session with very little movement until the release of the retail sales number and a quick move up into the mid-teens above 77 cent the market struggled with the level and held for the most part just above the 77 cent level through into the grey hour as trading slowed to a trickle. Topside offers still remain in depth through to the 0.7760 levels, even a push through this level is likely to see only limited stops and the focus will remain on the 0.7780-0.7800 areas and strong offers with a mix of stops on a strong push into the area. Downside bids light through the downside with congestion increasing only as the market pushes into the 0.7660 levels with strong congestion then continuing through to 0.7640 and the lows of the year, stops likely on a push through however, the congestion is likely to continue through the 76 cent areas and the stops absorbed along the way.

Overnight News

JPY:

Kuroda says BoJ is discussing future exit options (early London yesterday)

The Tokyo Whale steps up with record purchases of Japan’s stocks

CNY:

China strongly condemns, firmly opposes the unfounded section 301 investigation

China’s US embassy says unilateralist and protectionist action has gravely violated fundamental principles and values of WTO

Embassy: says China will resort to WTO and take corresponding measure of equal scale and strength against US products

Embassy: hopes US will refrain from going further down the wrong path on trade

China to respond to new US duties with same scale and intensity

China puts banks under the microscope to tackle debt problem

USD:

CBS submits initial bid for Viacom at price below market value

API is said to report US crude stocks fell 3.28M bbl last week

US issues list of Chinese products proposed for tariffs

List covers 1300 tariff lines for public review

USTR says to impose tariffs on about $50B of China imports

No White house action on Amazon at this time, but that could change source Rtrs

Mueller says Trump remains under investigation WAPO

Trump: send military to US-Mexico border until wall built

Trump: tightens screws to reach a NAFTA deal

NZD:

Whole milk powder average price rises to $3,278 a ton

NZ Treasury says consumption should continue to support growth

EUR:

Five star will offer German styled government pact with two parties, democratic party and League

Today’s data

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

GBP       BRC Shop Price Index Y/Y Mar A -1.00% | P -0.80%

AUD       Retail Sales M/M Feb A 0.60% | C 0.30% | P 0.10%

AUD       Building Approvals M/M Feb A -6.20% | C -5.00% | P 17.10%

CNY        Caixin PMI Services Mar A 52.3 | C 54.5 | P 54.2

08:30     GBP       Markit/CIPS UK Construction PMI Mar C 51 | P 51.4

09:00     EUR        Eurozone Unemployment Rate Feb C 8.50% | P 8.60%

09:00     EUR        Eurozone CPI Estimate Y/Y Mar C 1.40% | P 1.20%

09:00     EUR        Eurozone CPI Core Y/Y Mar (A) C 1.10% | P 1.00%

12:15     USD       ADP Employment Change Mar C 205K | P 235K

13:45     USD       US Services PMI Mar (F) C 54.3 | P 54.1

14:00     USD       ISM Non-Manufacturing/Services Composite Mar C 59 | P 59.5

14:00     USD       Factory Orders Feb C 1.70% | P -1.40%

14:30     USD       Crude Oil Inventories P 1.6M

 

Harry Hindsight

• EUR: A quiet Asian session with the market opening around the 1.2305 levels trading around the 1.2300 level through to deeper into the session rising to the grey hour to test the 1.2310 levels, London were quiet buyers on the back of German retail sales with the market pushing to the 1.2335 areas before running out of time and weaker PMI numbers saw the market dropping back through the morning session into the NYK period testing to the 1.2290 levels. The move into NYK saw the market sold quiet quickly as USD bulls appeared as Trumps trade war made a step forward, With weaker numbers in Europe the Euro dipped back to the 1.2255 levels before bottoming out and holding the level and a slow rise through to the 1.2270 levels.
• GBP: Cable traded just as quietly through the Asian session rising through the 1.4060 levels before gyrating a little and then heading into London on the highs, rising steadily in London to test to the 1.4090 levels the market holding for a short while around the level before slipping back and testing quickly through to the 1.4020 levels as the market struggled with the topside, the market bounced off the lows and pushed into the NYK session testing back to the 1.4070 level ranging in the 1.4030-70 areas through to the end of London the market drifted a little to the close but held in the positive side.
• JPY: Drifting a little from the opening the market tested to the 105.70 levels and the lows of the day to slowly rise through the day with a minor spot of selling into the London opening and then renewing the tight channelled rise through to the NYK session, the market moved a little quicker from the 106.30 levels and soon looked to be pushing through the 106.60 level however, after several attempts the market stalled and the USDJPY traded for a period around the 106.50 levels finally pushing to the 106.65 areas and continual tests to the close.
• AUD: Early trading was quiet however, the Oz slowly started to push higher with better AiG numbers helping the market to slowly rise into the London session to the 0.7690 levels, early London took the market to the 0.7705 areas to make the highs of the day however, a little bit of a false dawn and the market slipping through to the NYK session testing the 0.7680 areas, NYK had the same story with the 77 cent level again tested and then quickly back as the market failed to move on and the USD buyers moved in, the market having dipped to the 0.7670 areas then held through to the close.

Yesterday’s premiership results

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%

EUR        German Retail Sales M/M Feb A 0.70% | C 0.70% | P -0.70% | R -0.80%

CHF        Retail Sales Real Y/Y Feb A -0.20% | C -0.70% | P -1.40% | -0.40%

CHF        PMI Manufacturing Mar A 60.3 | C 64.3 | P 65.5

EUR        Italy Manufacturing PMI Mar A 55.1 | C 55.5 | P 56.8

EUR        France Manufacturing PMI Mar (F) A 53.7 | C 53.6 | P 53.6

EUR        Germany Manufacturing PMI Mar (F) A 58.2 | C 58.4 | P 58.4

EUR        Eurozone Manufacturing PMI Mar (F) A 56.6 | C 56.6 | P 56.6

GBP       PMI Manufacturing Mar A 55.1 | C 54.7 | P 55.2 | R 55

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