Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 111.192 | EURUSD 1.13276 | AUDUSD 0.70956 | NZDUSD 0.68471 | USDCAD 1.33012 | USDCHF 1.0038 | GBPUSD 1.33382 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13379 | 1.13175

USDJPY                 111.628 | 111.147

GBPUSD               1.33349 | 1.32395

USDCHF               1.00459 | 1.00297

AUDUSD              0.70978 | 0.70588

USDCAD               1.33151 | 1.32876

NZDUSD               0.68652 | 0.68352

EURCHF                1.13727 | 1.13639

EURGBP               0.85503 | 0.85062

EURJPY                 126.417 | 125.94

For Today

• GBP: Opening a touch lower the market slowly drifted through the session pushing through the 1.3300 in early trading before Tokyo and then holding briefly into the new session, the pause was brief before again slowly pushing through to just below the 1.3250 levels and holding through to the grey hours, Topside offers thin through to the 1.3380-1.3400 level with congestion likely to appear on a move through the level and possibly absorbing what stops there are until the 1.3430-50 level where weakness is likely to reappear and stronger stops appearing for a push to the weak 1.3500 areas and sentimental values only. Downside bids very weak and really nothing special until the market moves back onto the 1.3000 level after 48hrs of moves higher and lower, weak congestion through to that level if the market moves back onto that handle, with congestion likely to continue through to slightly stronger bids into the 1.2950-1.2900 areas.
• JPY: Moving off the 111.20 level the market made initial advances towards the 111.30 areas before drifting back to the starting levels for the move into Tokyo and buyers appearing through the session pushing in steps through to the 111.60 level before ranging in the 111.50-60 areas through to the grey hours, Topside offers into the 111.80-112.20 level however, given the amount of time the market has failed the level one has to suspect stops appearing in size through the level and the market opening quickly through to sentimental offers only around the 112.50 areas and only limited offers through to the stronger 113.00-30 area. Downside bids light through to the 111.00 area with some congestion however, stronger congestion is likely to appear on any dip through the level and continue through to the 110.50 levels with limited stops likely to be absorbed, even if the market breaches the 110.50 level the 110.00 area is likely to be even tougher to push cleanly through.
• AUD: Holding around yesterdays highs the market started to tip over as it moved towards Tokyo with several articles not helping the Oz, falling through the session the market stalled initially around the 0.7070 area but the CNY numbers gave little respite and the market again slipped lower and back to the 0.7060 levels, 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: Early buyers pushed a little higher as the market again adjusts to the level of GBP, the Euro tested close to the 1.1340 levels before the drag of the falling Cable started a slow drift through the session to the 1.1320 before holding through to the grey hours, Topside congestion through the 1.1340-60 area with the market then opening to stronger offers into the 1.1380-1.1420 area with weak stops on a move through the level however, congestion is likely to be still present and limiting any rush through to the stronger 1.1480-1.1500 level. downside bids congested a little around the 1.1300 levels however, weak stops on a move below the 1.1280 level and the market again opening to the 1.1200-1.1180 areas with strong bids likely in the area, any push through the level is likely to see continuing congestion through to the 1.1150 levels before any weakness truly appears.

Overnight News

GBP:

Parliament votes in favour of amended motion on no deal

Votes to rule out no deal Brexit both of which are non-binding

PM May: Reiterates that, despite this vote the legal default position remains that the UK will leave the EU without deal unless something is agreed

Without finding a consensus on a deal in the coming days there will need to be longer extension of Article 50

Govt. will propose a short extension if a deal is passed by 20^th March

PM May’s gamble has backfired Her MPs would sooner extend Brexit than accept her awful deal

EUR/GBP:

EU’s Moscovici: EU states must prepare customs for hard Brexit

Moscovici: Hard Brexit risk has substantially increased

Moscovici: There won’t be new negotiations by Mar 29^th

Moscovici: Eu did everything it could for Brexit deal

Mitteldeutsche Zeitung: Theresa May is a lame duck DPA

Michael Barnier advocates tough EU line on Brexit delay – FT

AUD:

States face billion AUD native title compensation bill after high court AFR

Australians start to worry about their jobs as business, consumer confidence drops

Australian RMBS arrears to remain elevated in 2019 BFW

Rate cut during election on the cards – AFR

TWD:

Taiwan is said to court bank to loosen China diplomatic squeeze

JPY:

Japan inflation barometer points to zero price growth by summer BBG

Japanese bought net 245.7B Yen overseas debt last week BBG

USD:

Ex-National economic council head Cohn, US desperate to sign trade deal with China

CNY:

Weaker China data

Today’s Data

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

AUD       Consumer Inflation Expectation Mar A 4.10% | P 3.70%

GBP       RICS House Price Balance Feb A -28% | C -24% | P -22%

CNY        Fixed Assets Ex Rural YTD Y/Y Feb A 6.10% | C 6.00% | P 5.90%

CNY        Industrial Production YTD Y/Y Feb A 5.30% | C 5.50% | P 6.20%

CNY        Retail Sales YTD Y/Y Feb A 8.20% | C 8.10% | P 9.00%

06:45     CHF        SECO Economic Forecasts

07:00     EUR        German CPI M/M Feb (F) C 0.50% | P 0.50%

07:00     EUR        German CPI Y/Y Feb (F) C 1.60% | P 1.60%

07:30     CHF        Producer & Import Prices M/M Feb C -0.10% | P -0.70%

07:30     CHF        Producer & Import Prices Y/Y Feb C -1.00% | P -0.50%

12:30     CAD       New Housing Price Index M/M Jan C 0.00% | P 0.00%

12:30     USD       Import Price Index M/M Feb C 0.30% | P -0.50%

12:30     USD       Initial Jobless Claims (MAR 09) C 225K | P 223K

14:00     USD       New Home Sales M/M Jan C 0.30% | P 3.70%

14:00     USD       New Home Sales Jan C 623K | P 621K

14:30     USD       Natural Gas Storage P -149B

Harry Hindsight

• GBP: Opening around the 1.3060 areas and a slow rise through the first hour before dipping back for the move into the Tokyo session, Tokyo slowly took the market through to the 1.3090 areas and the market moved quietly through to the grey hours, the move through to the London session saw the 1.3100 level breaking with minor stops triggering a spike to the 1.3120 level before restarting the rally again from the figure level and slowly pushing through to the 1.3100 levels, a slow grind through the day as the market awaited the next vote and no surprise’s really with each avenue blocked and while the possibility of an extension to the Brexit period both votes today were not legally binding however, the market stalled through to the end of the London session holding around the 1.3200 level and the vote results then helping the market to again run quickly higher to trigger weak stops on a move through the 1.3350 level and a spike through to the 1.3380 areas before dipping a little to the close.
• JPY: A very quiet session through the day with the market for the most part trading around the 111.30 levels, early trading saw the market just slightly higher from that level trading through into Tokyo holding around the 111.30 levels before dipping into early Tokyo through to the 111.15 area before reversing and slowly moving back to the 111.30 level and basing on that level through deep into London before rising to the highs for the day and testing the 111.45 areas, NYK saw a slow drift lower and the movement of GBP saw the GBPJPY profit taking forcing the USDJPY back through the lows of the day to test towards the 111.00 area before slowly recovering after the results of UK votes and the market pushing back to the 111.20.
• AUD: Opening around the 0.7085 level the market slipped slowly lower into the release of the confidence numbers and then dropped quickly through the 0.7060 level on weaker numbers, the market initially bounced to the 0.7070 level and again slipped lower through to the 0.7050 level and based along that level through into the grey hours, London slowly bought the Oz and managed to push again to the 0.7070 area however, the initial push failed and the market then held in a narrow range through deep into the NYK session before attempting the topside again, the market continued pushing to the 0.7090 areas stalling for a brief period before pushing steadily through to the 0.7098 areas for the run to the close.
• EUR: lifting from the 1.1285 area the market found limited offers into the 1.1290 areas and unable to push through the level deep into the day, drifting off back to the opening levels the market dropped on the London session to make the lows just through the 1.1280 area before rallying through to the 1.1295 area and a slow rising range through to the NYK session, the move through to the UK votes saw the market holding around the 1.1310 level before rising through to the 1.1330 and ranging around the level through to the close.

Yesterday’s Premiership results

AUD       Westpac Consumer Confidence Mar A -4.80% | P 4.30%

JPY         Domestic CGPI Y/Y Feb A 0.80% | C 0.70% | P 0.60%

JPY         Machine Orders M/M Jan A -5.40% | C -1.50% | P -0.10%

JPY         Tertiary Industry Index M/M Jan A 0.40% | C -0.30% | P -0.30% | R -0.50%

EUR        Eurozone Industrial Production M/M Jan A 1.40% | C 1.00% | P -0.90%

USD       PPI M/M Feb A 0.10% | C 0.20% | P -0.10%

USD       PPI Y/Y Feb A 1.90% | C 1.90% | P 2.00%

USD       PPI Core M/M Feb A 0.10% | C 0.20% | P 0.30%

USD       PPI Core Y/Y Feb A 2.50% | C 2.60% | P 2.60%

USD       Durable Goods Orders Jan (P) A 0.40% | C -0.50% | P 1.20% | R 1.30%

USD       Durables Ex Transportation Jan (P) A -0.10% | C 0.10% | P 0.10% | R 0.30%

USD       Construction Spending M/M Jan A 1.30% | C 0.40% | P -0.60% | R -0.80%

USD       Crude Oil Inventories A -3.9M | C 2.7M | P 7.1M

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