Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 109.771 | EURUSD 1.13629 | AUDUSD 0.71628 | NZDUSD 0.6743 | USDCAD 1.3266 | USDCHF 0.99547 | GBPUSD 1.28741 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13804 | 1.13604

USDJPY                 109.780 | 109.475

GBPUSD               1.28852 | 1.2848

USDCHF               0.99596 | 0.99445

AUDUSD              0.71807 | 0.71503

USDCAD               1.32754 | 1.32511

NZDUSD               0.67425 | 0.67153

EURCHF                1.13237 | 1.13088

EURGBP               0.88487 | 0.88164

EURJPY                 124.828 | 124.516

For Today

  • GBP: Opening around the 1.2880 level the market drifted from the opening dropping into the Tokyo session testing the 1.2850 level before finding a base and slowly rising to hold the 1.2860 areas through to the grey hours, light bids through to the 1.2800 level with possibly stronger bids through into congestion below the 1.2780 areas and continuing to the 1.2720 level and another strong area for bids, very little in the way of stops suspected, topside offers light through the 1.2900 areas with some minor congestion on a run to that area, weak stops on a move through the 1.2920 areas again could see some movement towards the 1.3000 area where possibly the strong offers lay, with weak stops and possibly stronger breakout stops are likely to appear.
  • JPY: Limited range through the session with the move through into the Tokyo session seeing the USDJPY dropping off from the opening highs around the 109.75 area to test lightly through the 109.50 level before ranging between the two levels through to the grey hours with the market again falling into the 109.50 area for the grey hours. Topside offers likely to increase on any approach to the 110.00 levels with weak stops on a move through the 110.20 level and possibly open the market to a quick move to the 110.50 area before slowing into congestive offers, a break through the 110.60 area will see a small opening through to the 110.80 level before stronger offers start to appear into and through the figure level and continuing through to 111.50 area. downside bids light into the 109.00 level however, congestion is likely to be a little deeper with a mixture of weak stops through the 108.80 areas quickly being absorbed on any dips towards the 108.60-40 areas and stronger bids reappearing into the 108.20 areas.
  • AUD: Holding quietly in the 0.7160-70 area deep into the Tokyo session the market dipped through to the 0.7150 in a limited move before rising again and triggering some limited stops through to the 0.7180 areas and returning to the opening ranges through to the grey hours, Downside bids light through to the 0.7160 level and the congestion likely to continue into the 0.7140 levels, weak stops on a move through the level could have some impact on the 71 cents areas however, bids in the area are likely to take the edge off the move and only a break below the 71 cents will see stronger stops appear. Topside offers light through to the 0.7220 level where the market has been held for the most part this week limited potential for damaging stops with stronger offers likely to appear quickly around the 0.7240-60 level and possibly a tall order for the Oz.
  • EUR: Euro opened on its lows, lifting off the 1.1360 area and eventually pushing through the 1.1370 level on the move into the Tokyo session and ranging around the 1.1375 areas having lightly tested through the 1.1380 level, Topside offers congested through the 1.1420 level for the moment but expect some weak stops to appear for a move to the stronger sentimental area around the 1.1440-60 area and while there may be a patch of weakness the market builds to stronger offers on any push for the 1.1500 level. downside bids in the current areas, downside offers light through to the 1.1340 levels with stronger bids likely to appear on any push for the 1.1320-00 area, a break through the 1.1275 areas could see weak stops taking over and a quick move through to the 1.1220 level and the lows from Nov tested however, strong bids are likely to be in the area.

 

Overnight News

EUR:

Dublin rejects idea of alternative deal for Irish border post Brexit Politico

France and Germany to sign a new treaty aimed at breathing new life into the centre of the EU

GBP:

Theresa May mulls amending the Good Friday agreement to get her Brexit deal past MP’s

CNY:

China has ample room for macro policy support stats bureau chief

China should boost banks active support for economy Central bank official

China drone giant DJI unearths US$150M losses from fraud

 

Today’s Data

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

GBP       Rightmove house prices A 0.40% | P -1.50%

CNY        Retail sales YoY Dec A 8.20% | C 8.10% | P 8.10%

CNY        Industrial production YoY Dec A 5.70% | C 5.30% | P 5.40%

CNY:      Fixed assets Ex Rural YTD YoY Dec A 5.90% | C 6.00% | P 5.909%

CNY        GDP YoY Q4 A 6.40% | C 6.40% | P 6.50%

0700       EUR        German PPI MoM Dec C -0.10% | P 0.10%

0700       EUR        German PPI YoY Dec C 2.90% | P 3.30%

 

Harry Hindsight

  • GBP: Opening around the 1.2985 areas the market traded quietly through into the Tokyo session drifting into the new centre to test through to the 1.2965 areas before slowly pushing to make the highs just short of the 1.2995 level, failing the level the market pushed back quickly to the lows and ranged narrowly around the 1.2980 through into the grey hours, pushing through the grey hours the market saw some two way trading with the sellers forcing the market back to trade into the London opening testing through the 1.2950 and holding below the level, the market then ranged around the 1.2930-40 areas through into the NYK session before more weakness appeared as the Brexit wagon continues to remain stalled in the middle of the highway, a steady drift stall initially at the 1.2900 areas before pushing through and dipping away as continued selling sent the market back to the 1.2860 level before finding some respite, and more than likely the longs from the week unwilling to hold their positions over a weekend.
  • JPY: Early weakness in the USDJPY disappeared on the movement into the Tokyo session rising from the 109.05 lows and pushing quickly through to the 109.35 areas before slowly edging higher through the balance of the session and into the grey hours testing the 109.45 areas, London opening pushed the market through the 109.50 levels testing lightly towards the 109.60 area before holding in a quiet range through into the NYK session around the 109.35-50 areas, better industrial numbers from the US helped the USD rise and quickly push through the previous highs with the market continuing a steady course from the initial rise to push the 109.90 to make the highs and then drop back to hold the 109.80-70 levels to the close.
  • AUD: Very limited day with the market initially moving off its opening lows to push quickly in the Tokyo session to hit the 0.7205 areas and Asian highs, ranging through the Asian session holding the 0.7190 level for the most part but unable to push through the 0.7200 areas again the market held into the grey hours, London sold in a limited fashion pushing the market through the 0.7180 level before spending several hours pushing back to the early ranges, the weakness in the Yen saw the Oz spike higher and push quickly to the 0.7215 area before dropping quickly once the suspected option play was out of the way and dipping through to the 0.7170 areas to range for several hours in the area and then slipping to make the lows of the day into the close.
  • EUR: For the first half of the day the market was very quiet, opening around the 1.1390 level and pushing lightly through to the 1.1400 level and ranging between the two deep into the London session before breaking above the 1.1400 area to test to 1.1410, the market held above  the 1.1400 levels for a few hours deep into the NYK session before starting a quick move through to the 1.1350 levels and finding a base holding to move slowly through to the 1.1370 level in a quiet move to the close.

 

Weekend News

EUR:

Alpine tunnel splits Italy’s populists DJ

EU is said to be split over delaying Brexit by as much as a year BBG

Merkel warns EU compromise is needed to avert harmful Brexit BBG

Italy downward forecasts show need for expansive budget – Borghi

EUR/GBP:

Britain’s Brexit dithering “its time to let go Speigel

Germany’s Maas: Can’t see UK-Ireland talks solving Brexit deadlock RTRS

Maas: It is unclear to me how any UK, Dublin talks could work, Britain needs a Brexit deal with whole EU

Maas: Will be very difficult to renegotiate Britain’s withdrawal agreement with EU

Maas: There are some in the EU who reject new talks, others are open to them, we have to wait for Britain’s proposals – RTRS

GBP:

Big short Guru says Corbyn bigger risk than no deal Brexit Telegraph

May said to tell cabinet Brexit must pass on Tory votes BBG

Britain is operating as if Brexit delay is there for the taking, it’s not WPT

Leave campaign mobilises for inevitable second Brexit referendum Telegraph

UK Retail property values may be slashed Sunday Times

AUD:

SMSF (self-managed super funds) mortgages a ticking time bomb ATO

Property price falls could double AFR

Australian Minister quits in blow to PM Morrison in election year – BBG

USD:

Fed’s Harker says High level economic data look really good BFW

CNY/USD:

China is said to offer path to end US trade imbalance – BBG

 

Yesterday’s Premiership results

NZD       BusinessNZ Manufacturing PMI Dec A 55.1 | P 53.5 | R 53.7

JPY         National CPI Core YoY Dec A 0.70% | C 0.890% | P 0.90%

JPY         Industrial production MoM Nov (F) A -1.00% | C -1.10% | P -1.10%

CHF        Producer & Import Prices MoM Dec A -0.60% | C -0.20% | P -0.30%

CHF        Producer& Import Prices YoY Dec A 0.60% | P 1.40%

EUR        Eurozone Current Account (EUR) Nov A 20.3B | C 24.1B | P 23.0B | R 26.8B

GBP       Retail Sales Ex Auto Fuel MoM Dec A -1.30% | C -0.50% | P 1.20% | R 1.00%

GBP       Retail Sales ex Auto Fuel YoY Dec A 2.60% | C 4.00% | P 3.80% | R 3.50%

GBP       Retail Sales Inc Auto Fuel MoM Dec A -0.90% | C -0.70% | P 1.40% | R 1.30%

GBP       Retail Sales Inc Auto Fuel YoY Dec A 3.00% | C 3.50% | P 3.60% | P 3.40%

CAD       Intl Securities Transactions (CAD) Nov A 9.45B | C 2.05B | P 3.98B | R 3.97B

CAD       CPI MoM Dec A -0.10% | C -0.30% | P -0.40%

CAD       CPI YoY Dec A 2.00% | C 1.80% | P 1.70%

CAD       CPI Core Common YoY A 1.90% | C 1.80% | P 1.90%

CAD       CPI Core Median YoY Dec A 1.80% | C 1.90% | P 1.90%

CAD       CPI Core Trimmed YoY Dec A 1.90% | C 1.80% | P 1.90%

USD       Industrial production MoM Dec A 0.30% | C 0.20% | P 0.60% | R 0.40%

USD       Capacity Utilization Dec A 78.70% | C 78.40% | 78.50% | R 78.60%

USD       U. of Mich. Sentiment Jan (P) A 90.7 | C 96.1 | P 98.3

 

*US numbers affected by Government shutdown so may not appear when they are supposed to.

 

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LMAX Exchange Market Commentary   Andy Harrison  

Any opinions, news, research, analyses, prices or other information ("information") contained on this Blog, constitutes marketing communication and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the information contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. LMAX Group has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

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.