Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 110.484 | EURUSD 1.13261 | AUDUSD 0.70956 | NZDUSD 0.67317 | USDCAD 1.32358 | USDCHF 1.00664 | GBPUSD 1.28916 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13416 | 1.13243

USDJPY                 110.705 | 110.423

GBPUSD               1.29090 | 1.28876

USDCHF               1.00723 | 1.00532

AUDUSD              0.71353 | 0.70924

USDCAD               1.32451 | 1.31968

NZDUSD               0.68520 | 0.67276

EURCHF                1.14087 | 1.13953

EURGBP               0.87930 | 0.87752

EURJPY                 125.542 | 125.107

For Today

• GBP: A slow start saw the Cable drifting a little from the opening 1.2895 areas and testing into the high 1.2880’s before Tokyo fix helped the market to start a slow steady rise through the session to push above the 1.2905 areas and hold quietly through to the grey hours, , Downside congestion and possibly stronger bids into the 1.2800 areas with the congestion likely to continue through to the 1.2760-40 areas and then increasing in size on any dip through to the stronger 1.2700 areas. Topside offers light through to the 1.2900 level with some congestive offers likely to be moving into the areas with weak stops on a push through the level and opening up a quick move through to the 1.2980 areas where stronger offers are likely.
• JPY: Opening around the 110.45 levels the market saw early Tokyo moving in and slowly buying the market through to the 110.70 areas before finding sufficient offers to slow and turn the market lower again testing back through the 110.60 in limited trading but holding the area through to the grey hours, Topside offers continue through to the 111.00 areas with possible strong offers into the area, a push through the 111.20-40 areas will likely see weakness running to the 111.80 areas where limited offers are more sentimental, downside bids congested through the 110.00 level with bids likely to strengthen on a dip through the level and especially congested into the 109.40-60 areas with strong stops if the market can cleanly break the 109.00 areas.
• AUD: The Oz moved quietly through to the Tokyo session testing lightly through towards the 0.7110 levels before drifting a little back to make the lows around the 0.7095 level, Heath’s comments saw the market rising quickly through to the 0.7125 area and then a more sustained push through to the 0.7135 levels before holding quietly through to the grey hours around those highs. Downside bids increase on any dips through the 0.7060 areas and likely to continue and increase on any dip through towards the 0.7000 levels, weak stops and possible breakout stops on a dip through the 0.6980 areas, topside offers congested through to the 0.7200 levels with stronger offers likely to move into the area, a push through the 0.7220 levels will likely see weak stops appearing and the market opening up a little through to weaker congestion into the 0.7260 levels.
• EUR: The quietest currency with the market holding above the 1.1325 area openings in the 1.1330-40 level through to the grey hours, Downside bids down through the 1.2770 areas with stops likely on a dip through the level and the market likely open quickly for a test through to the 1.1220 areas and better bids likely to start to appear, with strong stops possibly through the 1.1200 areas. Topside offers light through to the 1.1350 area with congestive offers then increasing on any move towards the 1.1400 level with weak stops a possibility on a move through the level and then a return to weak congestion for a good distance.

Overnight News

MXN:

Bond market shows traders putting Mexico on the edge of junk BBG

NZD:

House price inflation slows to 7 year low QV

RBNZ keeps cash rate at 1.75%

RBNZ to keep OCR at expansionary level for considerable period

RBNZ Direction of next move could be up or down

RBNZ upside and downside risks to inflation outlook

RBNZ expect to keep OCR at this level through 2019 and 2020

RBNZ now forecasts rates rising in 1Q 2021 vs. 3Q 2020

RBNZ sees pickup in NZ GDP growth over 2019

RBNZ employment is near maximum sustainable level

RBNZ low inflation necessitates continued supportive policy

AUD:

ACCC probes big four over cartel conduct AFR

RBA’s Heath says income growth more important than wealth effect from housing RTRS

Heath uncertain if consumption can keep outpacing income growth RTRS

Heath Reasonably confident wage growth will pick up RTRS

Heath Income growth more important than wealth effect from housing

GBP:

Back PM May’s deal or prepare for a long delay to Brexit, PM’s Chief negotiator warns MP’s

RUB:

Russia has built a new 100 Megaton underwater doomsday device and repeatedly threatened the US

KRW:

1. Korea keeps stockpiling materials to make nuclear weapons, report finds

USD:

NY Fed: Auto loan delinquencies at highest point since 2010 – NP

Today’s Data

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

AUD       Westpac Consumer Confidence Feb A 4.30% | P -4.70%

JPY         Domestic CGPI Y/Y Jan A 0.60% | C 1.00% | P 1.50%

NZD       RBNZ Official Cash Rate A 1.75% | C 1.75% | P 1.75%

09:30     GBP       CPI M/M Jan C -0.70% | P 0.20%

09:30     GBP       CPI Y/Y Jan C 2.00% | P 2.10%

09:30     GBP       Core CPI Y/Y Jan C 1.90% | P 1.90%

09:30     GBP       RPI M/M Jan C -0.80% | P 0.40%

09:30     GBP       RPI Y/Y Jan C 2.60% | P 2.70%

09:30     GBP       PPI Input M/M Jan C 0.30% | P -1.00%

09:30     GBP       PPI Input Y/Y Jan C 3.80% | P 3.70%

09:30     GBP       PPI Output M/M Jan C 0.00% | P -0.30%

09:30     GBP       PPI Output Y/Y Jan C 2.20% | P 2.50%

09:30     GBP       PPI Output Core M/M Jan C 0.20% | P 0.20%

09:30     GBP       PPI Output Core Y/Y Jan C 2.30% | P 2.50%

09:30     GBP       House Price Index Y/Y Jan C 2.50% | P 2.80%

10:00     EUR        Eurozone Industrial Production M/M Dec C -0.40% | P -1.70%

13:30     USD       CPI M/M Jan C 0.10% | P -0.10%

13:30     USD       CPI Y/Y Jan C 1.50% | P 1.90%

13:30     USD       CPI Core M/M Jan C 0.20% | P 0.20%

13:30     USD       CPI Core Y/Y Jan C 2.10% | P 2.20%

15:30     USD       Crude Oil Inventories P 1.3M

19:00     USD       Monthly Budget Statement Dec C -10.0B | P -204.9B

Harry Hindsight

• GBP: Limited movement through the Asian session with slightly better volume moving through the market for the period, moving off the early lows around the 1.2860 area the market slowly pushed up to the 1.2870 area before holding through to the grey hours and a little more movement but only just, the move into the London session saw the market moving through the 1.2880 areas before dropping back quickly with Brexit comments impacting the market and the fall back position of what article 50 says if no agreement is found, the market struggled off the 1.2830 area lows and although it slowly moved through to the 1.2860 area for the move into the NYK session it was the NYK traders that swiftly bought the market and tested initially through to the 1.2890 level before testing the 1.2910 area once London had left, the move to the close was a quiet drift with the market finishing just above the 1.2890 areas.
• JPY: Opening just below the 110.40 levels the market chopped around the 110.40-50 areas through into the Tokyo session before pushing to the day’s highs just short of the 110.70 area, the market ranged through to early London holding the 110.50-70 areas before drifting through the downside into the NYK session testing to the 110.35 level and rising through to hold quietly around the 110.50 area.
• AUD: The market traded quietly for the first couple of hours around the 0.7060-65 areas before moving quickly higher and then back off again on the Oz numbers, the market eventually rallied slowly through the day to the 0.7085 level and ranged around the 0.7080 level through to deep into the London session, rising through the NYK session to push lightly above the 71 cents area the market drifted a little on a long run to the close.
• EUR: A quiet range for Asia saw the Euro rise slowly through from the opening 1.1275 areas to the 1.1285 level with hardly a blip to the downside, the move into the grey hours saw the topside extended only to the 1.1290 areas before dropping back quickly as Brexit had limited impact, moving off the 1.1260 areas saw the market steadily rise through to the NYK session knocking on the door of the 1.1300 area and as the London session came to a close the market quickly rose through to the 1.1320 level paused and ran again to the 1.1340 before drifting quietly to a close.

Yesterday’s Premiership results

JPY         Japan Money Stock M2+CD Y/Y Jan A 2.40% | C 2.40% | P 2.40%

AUD       Home Loans M/M Dec A -6.10% | C -2.00% | P -0.90%

AUD       NAB Business Confidence Jan A 4 | C 3 | P 3

AUD       NAB Business Conditions Jan A 7 | C 4 | P 2

JPY         Tertiary Industry Index M/M Dec A -0.30% | C -0.10% | P -0.30%

JPY         Machine Tool Orders Y/Y Jan (P) A -18.80% | P -18.30%

USD       NFIB Small Business Optimism Jan A 101.2 | C 103 | P 104.4

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material 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. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX 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 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 material produced in this Blog was obtained from sources deemed to be reliable, LMAX 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.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting 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.