Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 109.398 | EURUSD 1.14331 | AUDUSD 0.71552 | NZDUSD 0.68296 | USDCAD 1.32698 | USDCHF 0.99467 | GBPUSD 1.30664 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.14442 | 1.14273

USDJPY                 109.439 | 109.214

GBPUSD               1.30965 | 1.30612

USDCHF               0.99541 | 0.9941

AUDUSD              0.71990 | 0.71506

USDCAD               1.32802 | 1.32537

NZDUSD               0.68525 | 0.68213

EURCHF                1.13853 | 1.13691

EURGBP               0.87549 | 0.87346

EURJPY                 125.149 | 124.889

For Today

• GBP: Mixed start with the market moving off the 1.3065 area to push just above the 1.3080 level, early Tokyo dropped the market to just above the 1.3060 level before the market bounced back, the opening in Tokyo saw steady buying moving through the market and Cable topping just above the 1.3095 levels holding quietly for several hours before drifting just a touch lower for the move into the grey hours, Congestion to the downside through the 1.3040 level and likely to increase on a move to the 1.3000 level, weak stops on a break through the level sees a poorly protected 1.2900 handle with weak bids into the sentimental levels will likely see strength moving into the 1.2900 levels and stronger congestion on a dip through the level, some weak stops in the mix and dependent on the impetus the downside opens through to the stronger 1.2800 levels. Topside offers light through the 1.3120 areas and the market then reopens to the 1.3200 area and the stronger offers just above the level with weak stops on any move through the 1.3220 and opening up the chance of a stronger move through to the 1.3300 level.
• JPY: Early buyers took the USDJPY through to the 109.45 area to make the highs of the day, moving through into the Tokyo session drifting through to the 109.30 levels and a quick drop through the level saw the market quickly make its lows into the 109.20 areas, the market slowly rose through the session to the opening levels for the move into the grey hours, Light bids in the current area will likely continue through to the 109.00-108.80 areas with congestion likely to be mixed with some weak stops mixed in, any move lower is likely to meet continual congestion before increasing into the 108.00 level, weak stops on any dip through the 107.80 level is likely to find stronger buyers appearing. Topside offers through the 109.80 level are likely to have been replaced and continuing through the 110.00 level with quick stops appearing on a move through the 110.20-30 areas and opening a quick move through to the 110.60 level and likely increasing on any attempt to the 111.00 levels.
• AUD: A quiet move through into the Tokyo session holding around the 0.7155 levels, the release of stronger CPI numbers saw the market rising quickly as It underlines yesterday’s RBA comments on the next move in interest rates, the market stalled around the 0.7180 levels for a short period before starting a slower push through towards the 72 cents level into the grey hours, congestion on a move through the 72 cents and likely to continue lightly through to the 0.7240 areas and then increasing through to the 0.7260 level, some weakness just through the level will likely see increasing offers continuing through to the 73 cents areas. Downside bids light through to the 71 cents area before increasing bids start to increase with weak stops possibly increasing on a dip through to the 0.7080 areas, a break through the 0.7070 level will possibly see weak stops joined by larger stops and the market then opening to some weakness to the 70 cents areas.
• EUR: A very quiet Euro trading quietly through into the Tokyo session holding around the 1.1435 level, after a shake but weak start in Tokyo the market moved off the 1.1430 lows to push through to test above the 1.1440 level and hold for the most part around the level through to the grey hours, Topside still remains a little congestive with offers likely to reappear in size around the 1.1480-1.1500 areas, possible weak stops on a push through the 1.1520 areas and opening the market to a quick move through to the 1.1550 before any rally is tempered by stronger offers and likely to continue on any attempt to grind through those levels, downside bids light back through the 1.1400 levels with weak stops likely on a push through the 1.1380 level whether they are strong enough to push through the bids remains to be see with congestion fairly strong through to the 1.1320-1.1280 area where bids are likely to be strong.

Overnight News

GBP:

Parliament votes in favour of Spellman amendment against PM May’s wishes 318-310

Non-binding amendment that would block a no deal Brexit

Brady amendment was passed to renegotiate Brexit

USD:

Trump admin submits changes for USMCA trade deal Sen Grassley

CNY:

Chinese provinces slash growth goals as slowdown hits home BBG

China life’s massive loss surprises analysts expecting weak 4q

Huawei tells suppliers to move production to China as US ban looms

EUR/GBP:

EU rejects fresh Brexit negotiations Deutsche welle

AUD:

Lenders hedge bets on RBA rate cut AFR

ATO worried about $12B in SMSF loans (old but relevant) – AFR

VEF:

All eyes on the Army in Venezuela power struggle risk of Caribbean Syria – Spiegel

Today’s Data

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

JPY         Retail Trade Y/Y Dec A 1.30% | C 0.90% | P 1.40%

GBP       BRC Shop Price Index Y/Y Jan A 0.40% | P 0.30%

AUD       CPI Q/Q Q4 A 0.50% | C 0.40% | P 0.40%

AUD       CPI Y/Y Q4 A 1.80% | C 1.70% | P 1.90%

AUD       CPI RBA Trimmed Mean Q/Q Q4 A 0.40% | C 0.40% | P 0.40%

AUD       CPI RBA Trimmed Mean Y/Y Q4 A 1.80% | C 1.80% | P 1.80%

AUD       CPI RBA Weighted Median Q/Q Q4 A 0.40% | C 0.50% | P 0.30%

AUD       CPI RBA Weighted Median Y/Y Q4 A 1.70% | C 1.70% | P 1.70% | R 1.80%

JPY         Consumer Confidence Index Jan A 41.9 | C 42.5 | P 42.7

06:30     EUR        French GDP Q/Q Q4 C 0.30% | P 0.30%

07:00     EUR        German GfK Consumer Confidence Feb C 10.3 | P 10.4

08:00     CHF        KOF Leading Indicator Jan C 98.1 | P 96.3

09:30     GBP       Mortgage Approvals Dec C 63K | P 64K

09:30     GBP       Money Supply M4 M/M Dec C 0.20% | P 0.00%

10:00     EUR        Eurozone Business Climate Indicator Jan C 0.73 | P 0.82

10:00     EUR        Eurozone Economic Confidence Jan C 106.7 | P 107.3

10:00     EUR        Eurozone Industrial Confidence Jan C 0.6 | P 1.1

10:00     EUR        Eurozone Services Confidence Jan C 11.2 | P 12

10:00     EUR        Eurozone Consumer Confidence Jan (F) C -7.9 | P -7.9

13:00     EUR        German CPI M/M Jan (P) C -0.80% | P 0.10%

13:00     EUR        German CPI Y/Y Jan (P) C 1.60% | P 1.70%

13:15     USD       ADP Employment Change Jan C 170K | P 271K

13:30     USD       GDP Annualized Q/Q Q4 P 3.40%

13:30     USD       GDP Price Index Q4 P 1.80%

15:00     USD       Pending Home Sales M/M Dec C 1.10% | P -0.70%

15:30     USD       Crude Oil Inventories P 8.0M

19:00     USD       FOMC Rate Decision (Upper Bound) C 2.50% | P 2.50%

19:00     USD       FOMC Rate Decision (Lower Bound) C 2.25% | P 2.25%

Harry Hindsight

• GBP: Asia traded with no worries about the voting later for the day with the market holding quietly through the session testing through to the 1.3160 levels before drifting through in early Tokyo and then ranging around the 1.3150 through to the grey hours, light buying was quickly sold back into the London opening testing through the 1.3130 areas before regaining the initiative and pushing through to the 1.3175 area, a slow drift through to the NYK session saw the market running on the 1.3150 levels again and the move into the NYK session saw the market rising a little and then pushing quickly through to make the highs near the 1.3200 level, offers defeated the buyers and then saw a slow drift until the debating began and while the majority of amendments went down into the waste bin however, the debating put the Cable back to 1.3150 and then after some light movement the market dropped quickly back to the 1.3055 areas with Brady amendment sending May back to the EU to renegotiate, the market saw some choppy movement but the market held the downside from further losses.
• JPY: Very limited range for the USDJPY with the market still trapped and chatter about the market needing a selloff required for any further gains, the move through to the Tokyo session saw the USDJPY drifting from the opening just above the 109.30 areas and testing to the lows pushing through the 109.15 areas before spending the balance of the Tokyo session recovering and pushing towards the open, the market drifted through the grey hours testing the 109.20 level into the London opening and quick buying took the market through to the 109.45 levels, a slow rise through to the NYK session saw the market rising through to the 109.55 level and the highs for the day, the market then drifted through the balance of the session holding around the 109.35 area and finishing around that level.
• AUD: AS very narrow day with the market moving into the Tokyo session almost unchanged before dropping from the 0.7165 area to test through the 0.7140 level to make the lows for the day, the market recovered and ranged around the opening levels through the London session and into the NYK period before again attempting the downside, this run was to the 0.7150 levels and the market then put in a long quiet run holding tightly around the level to the close.
• EUR: Opening around the 1.1425 level the market held quietly through into the Tokyo session rising through the 1.1430 levels before dropping back to the 1.1420 in early trading, the market then spent several hours rising pushing through the grey hours and into the first hour of trading in London to test the 1.1450 level holding for a short period before Brexit comments were sufficient to chase the market lower with early buyers running out of steam, weak stops exaggerated the move a little however the move was only too the 1.1420 level, moving around the 1.1420 levels the market made the low to the 1.1415 areas before starting a slow rise through to the 1.1435 area for the close.

Yesterday’s Premiership results

NZD       Trade Balance (NZD) Dec A 264M | C 225M | P -861M | R -955M

AUD       NAB Business Confidence Dec A 3 | P 3

AUD       NAB Business Conditions Dec A 2 | P 11

CHF        Trade Balance (CHF) Dec A 1.90B | C 4.55B | P 4.74B

USD       S&P/Case-Shiller Composite-20 Y/Y Nov A 4.70% | C 5.00% | P 5.00%

USD       Consumer Confidence Index Jan A 120.2 | C 125 | P 128.1

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

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