Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 108.161 | EURUSD 1.14687 | AUDUSD 0.71968 | NZDUSD 0.68278 | USDCAD 1.32828 | USDCHF 0.98101 | GBPUSD 1.28663 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.14897 | 1.14644

USDJPY                 108.767 | 108.132

GBPUSD               1.29157 | 1.2847

USDCHF               0.98228 | 0.98023

AUDUSD              0.72220 | 0.7192

USDCAD               1.32831 | 1.3261

NZDUSD               0.68477 | 0.68118

EURCHF                1.12650 | 1.12407

EURGBP               0.89213 | 0.8891

EURJPY                 124.853 | 124.011

For Today

  • GBP: Optimism for something not sure what with the Cable opening around the 1.2865 areas and then steadily rising through into the Tokyo session pushing to the 1.2885 level before increasing its pace for a push through to make the highs around the 1.2915 levels, highs made the market drifted back and then held through to the grey hours around the 1.2900 level, congestion through the topside are likely to be weak and whichever way the vote goes either up or down is vulnerable to any strong move, limited offers through the 1.2950 level and only slightly stronger resistance of any test to the 1.3000 area, even with stronger congestion and an old trend line in the 1.3050 level could slow any rise through to the very limited sentimental areas above with weak stops with the market opening to the 1.3200 level. Downside bids light through to the 1.2800 areas and some congestion in the area with weak stops below and limited congestion then through to the 1.2700 areas, slightly stronger congestion through to 1.2600 areas with possibly stronger stops on a dip through the 1.2600 area and opening the downside for a deeper move.
  • JPY: Opening around the 108.15 level the return of the Tokyo market in full saw the market moving steadily off the level as the market opened and pushed steadily through to mid-session hardly pausing briefly for the move through but increasing in pace in the lead up to the grey hours to push through to test towards the 108.80 level, downside bids light through the 107.80 areas with possible weak stops on a move through the level and opening a quick stab towards the 107.00 level where congestion is likely to be a little stronger however, the flash crash managed to push through to the 105.20 areas so very little of the old bids remain and possibly vulnerable beyond the 107.00 area. Topside offers see some offers appearing on any move into and through the 109.00 and the point where the market initially broke down on the 3rd, so any move through could see some weak stops on a push through the 109.60 levels and opening the market to some weakness through to the 110.00 levels.
  • AUD: With a weakening JPY the Oz was allowed to rise after flirting with the 0.7190 level on the reopening, moving into the Tokyo pushing the 72 cents levels, a push through the level saw stronger buying moving in and a push to the 0.7210 level holding briefly before quickly pushing for the usual stops above 0.7220 level missing and dipping back to hold quietly around the 0.7210 level for the grey hours, topside offers remain around the 0.7220 areas with light stops through the level and then congestion reappearing through the 0.7240 level and continuing through to the 0.7260 level and increasing to stronger offers through to the 73 cents level. Downside bids light through to the 0.7180 area with weak stops likely to appear and limited downside congestion limited the downside again becomes vulnerable to the 0.7050 areas before sentimental values increase to support the market.
  • EUR: A small dip before the Tokyo session the market moved off the 1.1465 areas saw early Tokyo arrive to take the market slowly back higher, the push through the 1.1475 level saw the rise quickening as the market pushed for the 1.1490 level with a little more enthusiasm however, having hit the level a couple of times the market just didn’t have the impetus to break through the offers to test the 1.1500 level and having failed drifted for the rest of the session falling back to the grey hours to the 1.1475 areas. Topside offers through to the 1.1500 level with the market likely to see some weak stops on a push through the 1.1530 levels however, while there maybe a little room through the area the 1.1580 area is likely to see stronger offers through to the 1.1620 area capping any rally, downside bids light through to the 1.1450 level with congestion continuing through to the 1.1400 likely to be light with limited stops running into further congestion on any moves towards the 1.1350 area.

 

Overnight News

CNY:

China’s $300B tax cut is key growth stabilizer BBG

China will rebound from today’s peak pain but Maoist revival blights the future Telegraph

China’s woes raise risks for Asian interest rates, credit growth – BI

EUR/GBP

Bracing for bedlam: EU27 firm up no deal Brexit preparations BBG

UK, EU diplomats are said to now assume Brexit will be delayed BBG

Irish PM: No Brexit deal unlikely

Irish PM: Will reassess Brexit situation after vote

Irish PM: Have allow UK time to make Brexit decision

Italy’s top anti EU politician Beppe Grillo, warns against the death of democracy

AUD:

Negative equity makes it a tense time in property

JPY:

BoJ eases at slowest pace in Kuroda era Nikkei

Japanese rule change may dampen US CLO’s frenzy – BBG

EUR:

Euro area industry data signal big risk to ECB forecasts BI

Italy PM Conte says Europe could collapse over migration

Italian executives grow more pessimistic about economy BBG

German car exports to China from US fell 37% in 2018 Auto assoc

GBP:

PM May: Government is committed to leaving EU on March 29

May: Don’t believe Brexit date should be delayed

May: No deal Brexit could trigger break up of UK

May: Rejecting backstop would mean no deal with the EU

May: EU assurances don’t go as far as some lawmakers want

May: EU agreed to discuss using tech to avoid backstop

May: Backstop is last resort, both sides want to avoid using it

Corbyn (leader of opposition party) Calls for general election if Government loses Brexit vote

Corbyn EU letter contains only warm words and aspirations

Corbyn: PM May has failed to secure EU assurances on backstop

OECD:

OECD sees further slowdown in global economy this year DJ

TRY:

Wild Lira ride awaits if dissenters right on Kamikaze rate cut BBG

NZD:

NZ Business sentiment still poses downside risk to GDP – NZIER

 

Today’s Data

Actual A | Consensus C | Previous P | Revised R | all timings GMT/UTC

JPY         Japan Money stock M2+CD YoY Dec A 2.40% | C 2.40% | P 2.30%

JPY         Machine tool orders YoY Dec (P) A -18.3% | P -17.00%

1000       EUR        Eurozone Trade Balance (EUR) Nov C 13.2B | P 12.5B

1330       USD       Empire state manufacturing index Jan C 11.6 | P 10.9

1330       USD       PPI MoM Dec C 0.00% | P 0.10%

1330       USD       PPI YoY Dec C 2.50% | P 2.50%

1330       USD       PPI Core MoM Dec C 0.20% | P 0.30%

1330       USD       PPI Core YoY Dec C 2.70% | P 2.70%

 

Harry Hindsight

  • GBP: A slow start to the week saw the Cable opening a little stronger rising to the 1.2865 areas in early trading before slipping back into the Tokyo bank holiday session and trading through the first half of the day around the 1.2850 level, the move to the grey hours saw a little more weakness into the 1.2840 level and a tight range through to early London, strong selling saw the market pushing the lows of the day into the London opening before eventually starting a slow climb through to the 1.2850 level from the 1.2820 area, a break through the 1.2850 level saw some weak stops triggered and the market pushing to the 1.2875 level before again drifting back through into the NYK session to hit the 1.2840 level, with early NYK sated the buying appeared with Brexit and in particular PM May’s comments abounding finding some much needed bolster to a very quiet day and the market spiked quickly through to the 1.2930 areas before dropping back just as quickly into the London close then ranging in the 1.2860-80 range for the move through to the close finishing just off the bottom end of that range.
  • JPY: JPY buying through the Asian session with Tokyo out for the day, opening on its highs spiking on the opening to the 108.60 areas dipping quickly back through to the 108.40 level for the move through into the Tokyo period and then holding for a short time around the 108.55 areas before dropping again to the 108.20 level and finding some support for a short period before dipping back to the 108.10 areas the market then continued to range around the level through to deep into the London session before managing to dip lightly through the 108.00 level and starting a slow grind through into the NYK session and rising to above the 108.30 levels before running out of steam and drifting for a long period to the close.
  • AUD: Some warnings of a squeeze on margins in Tokyo with the Oz opening a touch lower then dipping from the opening 0.7210 areas to test the 72 cents level for the first time, light buying saw the highs in early Tokyo pushing the 0.7218 area before dropping back on news about capital adequacy problems for antipodean banks and the JPY buying infecting the AUDJPY cross and the Oz dropping quickly through the 72 cents levels and hitting the 0.7180 level and finding support through to the grey hours, grey hour selling pushed the 0.7180 level in attempt to reach stops however, the market found those bids a little deeper and the market rejecting the level to climb through the London opening back above the 72 cents level, the market then traded slowly higher for the move through to NYK and although we tested to the 0.7210 area the market was limited in volume and remained stuck for the most part around the figure area to the close.
  • EUR: Very limited volume and range with the Euro opening around the 1.1465 level almost unchanged from Friday before slowly moving through the session to test the 1.1480 level, all through the day the market tested the level but never found the impetus or willingness to push through to test the 1.1500 areas always drifting away from the level with a couple of choppy moves to set the lows just above the 1.1450 area and that was the range for the day with repeat movements through the day and finishing almost unchanged.

 

Yesterday’s Premiership results

AUD       ID Securities Inflation MoM Dec A 0.40% | P 0.00%

CNY:      Trade Balance (USD) Dec A 57.06B | C 51.6B | P 44.7B

CNY        Exports YoY (USD) Dec A 0.2% | C 6.6% | P 10.2%

CNY        Imports YoY (USD) Dec A -3.1% | C 12.0% | P 7.80%

CNY        Trade Balance (CNY) Dec A 395B | C 345B | P 306B

CNY        Exports YoY (CNY) Dec A -4.4% | C 2.0% | P 5.4%

CNY        Imports YoY (CNY) Dec A -7.60% | C 4.5% | P 3.00%

EUR        Eurozone Industrial Production MoM A -1.70% | C 0.30% | P 0.20%

 

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LMAX Exchange Market Commentary   Andy Harrison  

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LMAX Group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the produced information was obtained from sources deemed to be reliable, LMAX Group does not provide any guarantees about the reliability of such sources. Consequently any person acting on it does so entirely at his or her own risk. It is not a place to slander, use unacceptable language or to promote LMAX Group or any other FX and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.