Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 111.169 | EURUSD 1.12331 | AUDUSD 0.70453 | NZDUSD 0.68038 | USDCAD 1.34197 | USDCHF 1.00808 | GBPUSD 1.30152 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.12375 | 1.1223

USDJPY                 111.158 | 110.88

GBPUSD               1.29943 | 1.29607

USDCHF               1.00867 | 1.00788

AUDUSD              0.70455 | 0.70266

USDCAD               1.34333 | 1/3416

NZDUSD               0.68064 | 0.6791

EURCHF                1.13295 | 1.13177

EURGBP               0.86629 | 0.86476

EURJPY                 124.882 | 124488

For Today

• GBP: With the report that all but 2 of the Cabinet are against the Brexit deal saw the Cable opening around the 1.2975 levels and struggling to fill the gap from Fridays close, the move into the Tokyo session saw the market again testing to the 1.2960 levels before slowly through the balance of the session pushing towards the 1.2980 level and into the grey hours, Downside congestion through the 1.2960 levels with the market increasing bids into the 1.2900 areas before limited stops start to appear on a move through the figure level however, weakness is likely to start appearing on any dips through the 1.2860 areas with downside selling possibly increasing. Topside offers light through the 1.3000 level with limited stops on any move offers likely to be weak through to the 1.3060-1.3100 levels and limited through the level and up to the 1.3150 level where buying could possibly increase into the 1.3200 levels.
• JPY: Opening a little bit lower on the movement of Cable and cross GBPJPY selling the market quietly filled in the gap after testing the 111.00 areas, the opening in Tokyo saw a similar pattern with the market pushing through to the 110.90 levels before recovering to test back to the 111.15 levels and a slow move through to the grey hours holding around the 111.10 level. Topside offers through the 111.80 level and increasing into the 112.00 areas and through the level, having spent a week or so banging at the 112.10 levels the market is likely to initially struggle with the level but any break above the 112.20 areas is possibly going to see strong stops appearing and a quick run to the 112.60 area before resistance starts to increase again to slow the market into the 113.00 level.
• AUD: Oz opened lower and held for the most part in the 0.7030-40 areas, with minor moves to either side of the range before returning to the 0.7035 midrange through to the grey hours in very quiet trading, downside bids into the 70 cents level and possibly just through the level before weak stops appear however, congestion is possibly all the way down to the 0.6950 levels and strong in that area with only limited weakness on any further pushes to wards 69 cent, topside offer light through to the 71 cent level and while there may be some resistance that resistance is still building and a push through the 0.7120 level will see the congestion swept away to open the market to a slow grind higher and stronger offers through 0.7150.
• EUR: Only slightly out of line the Euro pushed through towards the Tokyo session testing just above the 1.1235 levels before dropping back as EURJPY selling moved through the early part of Tokyo, Euros tested into the low 1.1220’s before starting a slow climb back to the mid 30’s and the opening areas, Downside weakness exposes the 1.1170 levels still with congestion then reappearing and running through to the 1.1140 area before the market opens to very limited congestion and the potential for a deeper move through the 1.1080 areas and stops. Better bids likely around the sentimental areas possibly slowing a decline. Topside sees some congestion for any move towards the 1.1260 level and limited resistance to any move through the 1.1300 area and weak stops likely on a push through the 1.1310-20 area opening the market to a slow grind from there on.

Overnight News

KRW:

Images show N. Korea readying possible rocket launch Joongang

GBP:

BoE tightens Bank liquidity buffers before Brexit FT

NZD:

NZ Feb retail card spending rise 0.9% MoM est. 0.3%

AUD:

Hiring intentions plunge, except for bureaucrats MB

USD:

Powell: Fed won’t overreact to inflation modestly above 2%

Powell: Patience means FED is in no hurry to change rates

Powell: He didn’t stop rate hikes because of Trump pressure

Today’s Data

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

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

JPY         Machine Tool Orders Y/Y Feb (P) A -29.30% | P -18.80%

07:00     EUR        German Industrial Production M/M Jan C 0.50% | P -0.40%

07:00     EUR        German Trade Balance (EUR) Jan C 21.2B | P 19.4B

12:30     USD       Retail Sales Advance M/M Jan C -0.10% | P -1.20%

12:30     USD       Retail Sales Ex Auto M/M Jan C 0.30% | P -1.80%

14:00     USD       Business Inventories Dec C 0.60% | P -0.10%

23:50     JPY         BSI Large Manufacturing Q/Q Q1 P 5.5

Weekend News

CNY/USD:

China pushes against US trade demands on enforcement, Yuan BBG

US and China have reached consensus on many vital issues, Yi says BBG

CNY:

Chinese credit growth unexpectedly crashes in Feb BLG

China’s room for reserve ratio is limited, PBoC Yi says

JPY/KRW:

Japan weights tariff in S. Korea wartime labour dispute JIJI

EUR:

ECB officials defend stimulus as move needed to arrest slowdown BBG

ECB response to Eurozone slowdown risks doom loop Telegraph

EU readies anti-cartel fines of up to €1B each for German car giants Irish Times

GBP:

Public swinging behind no deal Brexit as Tories and DUP urge may to invoke plan B Telegraph

Minister claims only two members of Cabinet still support Theresa May – Telegraph

GBP/EUR:

UK dismisses EU Brexit concession BBG

EU prepares to demand multi Billion GBP increase on divorce payment from Britain in return for Brexit delay – Telegraph

TRY:

Debt catches up with Turkey as recession ends book and bust run BBG

Harry Hindsight

• GBP: Opening around the 1.3085 areas the market pushed slowly through to test towards the 1.3100 level into the grey hours, light selling through the grey hours set the market to the 1.3075 areas before early London stepped in and the market pushed through to the 1.3105 areas before drifting from the London opening and continuing through to the NYK session to test to the 1.3050 level, mixed US numbers with NFP less than expected but the unemployment rate dipping to 3.80% and average earnings helping the USD higher after a brief spike for the Cable, the market tested down through to the 1.3000 level and held just above the level through to the end of the session having made lows close to the 1.2990 level.
• JPY: Opening on its highs the USDJPY pushed towards the 111.65 level into the Tokyo session drifting slowly through the 111.50 areas holding for a few hours before starting the slow drift lower again, the market moved steadily lower into the grey hours before holding around the 111.00 areas into early morning in London and managing a small rise through to the 111.20 areas for the move through into the NYK session and a quick drop back to the 110.80 on the US numbers recovering again and struggling to the close holding around the 111.10 areas.
• AUD: A narrow range from the opening saw the market initially test to the 0.7025 areas into Tokyo before drifting back to test through to the 0.7010 levels, the range increased slightly with the high being extended just beyond the 0.7025 level and the fall back pushing through to the 0.7004 levels and holding that low through into the London session, London were steady buyers off the lows and pushed through the opening levels testing through to the 0.7030 areas before holding through to the NYK session, a little bit of whippy trading with the market spiking to the 0.7050 areas, the market dipped back to 0.7030 again before starting a more steady rise through to the 0.7050 level for the second time and then cruising slowly to the close holding in the 0.7045 areas.
• EUR: Opening around the 1.1195 areas the market initially struggled with the 1.1200 level and only the move into the grey hours saw the market started a slow but steady rise through the day, even around the US numbers the market moved only slightly out of the tight channel before reaching the 1.1240 level before settling into a fight range for several hours before dipping slightly to hold the 1.1230 to the close.

Yesterday’s Premiership results

NZD       Manufacturing Sales Q/Q Q4 A -0.50% | P 2.00% | R 1.80%

JPY         Overall Household Spending Y/Y Jan A 2.00% | C -0.60% | P 0.10%

JPY         GDP Q/Q Q4 (F) A 0.50% | C 0.40% | P 0.30%

JPY         GDP Deflator Y/Y Q4 (F) A -0.30% | C -0.30% | P -0.30%

JPY         Current Account Total (JPY) Jan (P) A 1.8.T | C 1.38T | P 1.56T | R 1.63T

CNY        Trade Balance (USD) Feb A 4.12B | C 27.15B | P 39.16B

CNY        Trade Balance (CNY) Feb A 34.4B | C 122.0B | P 271.2B

EUR        German Factory Orders M/M Jan A -2.60% | C 0.50% | P -1.60% | R 0.90%

CAD       Housing Starts Feb A 173.1K | C 203K | P 208K | R 206.8K

CAD       Net Change in Employment Feb A 55.9K | C -2.5K | P 66.8K

CAD       Unemployment Rate Feb A 5.80% | C 5.80% | P 5.80%

CAD       Capacity Utilization Rate Q4 A 81.70% | C 82.10% | P 82.60% | R 82.80%

USD       Change in Non-farm Payrolls Feb A 20K | C 185K | P 304K | R 311K

USD       Unemployment Rate Feb A 3.80% | C 3.90% | P 4.00%

USD       Average Hourly Earnings M/M Feb A 0.40% | C 0.30% | P 0.10%

USD       Building Permits Jan A 1.35M | C 1.29M | P 1.33M

USD       Housing Starts Jan A 1.23M | C 1.18M | P 1.08M | R 1.04M

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.