Daily FX Market Commentary

Good Morning,

LMAX Close

USDJPY 111.705 | EURUSD 1.13422 | AUDUSD 0.70956 | NZDUSD 0.68172 | USDCAD 1.33352 | USDCHF 1.00379 | GBPUSD 1.32422 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13272 | 1.12987

USDJPY                 111.903 | 111.488

GBPUSD               1.32664 | 1.32176

USDCHF               1.00407 | 1.0020

AUDUSD              0.70928 | 0.70618

USDCAD               1.33361 | 1.33073

NZDUSD               0.68519 | 0.68226

EURCHF                1.13572 | 1.13442

EURGBP               0.85514 | 0.85226

EURJPY                 126.569 | 126.196

For Today

  • GBP: A very quiet session with the market rising on the Attorney Generals legal advice rising through to the 1.3265 areas from the early low around 1.3220 before ranging around the 1.3250 level 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: USDJPY rose from a weak opening around the 111.65 level testing through to the 111.90 levels to make the highs for the day before reversing quickly once the Rate decision was released and the market testing quickly to the 111.50 areas bouncing weakly to the opening levels for the move into 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: Pushing from the lows just above the 0.7060 level the market moved into the Tokyo session testing through the 0.7070 level and once the JPY strengthened after the rate decision saw the Oz rallying through to the 0.7090 level before drifting back to the 0.7080 areas into the grey hours, 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: A quiet opening with cross JPY buying moving through the market for the move to the rate decision and then dipping away from the 1.1325 areas to the 1.1315 level for the move into 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

NZD:

NZ Widens response after finding more fruit flies in Auckland – BFW

NZ Manufacturing expansion buoyed by production – PMI

Annual immigration climbs under new methodology – BBG

AUD:

Australia’s spending bonanza gives RBA breathing room on rates – BBG

ASIC boss slams banks fightback against regulation – MEA

Labour figures are not the RBA’s saviour – AFR

GBP/EUR:

UK Attorney General Cox: attempting to win over Eurosceptic tory MPS and the DUP with new legal advice – Telegraph

Cox: States that Britain will be able to break off from Irish backstop under terms of the Vienna convention – Telegraph

Brexit vote moves Britain closer to the brink, Flirting with disaster – Spiegel

EU politicians believe withdrawal agreement is dead – Spiegel

Risk of no deal grows significantly – Spiegel

CAD:

BoC Deputy Governor Carolyn Wilkins: High global debt makes Canada, rest of world vulnerable to another period of financial instability

Wilkins: Trade war between US/China, growing geopolitical unrest are top of mind for bank, rising global debt concerns me the most

Wilkins: No one gains, and everyone loses in trade wars, end to US tariffs on steel and aluminium would be a welcome relief

Wilkins: Global financial system in better place than 2007, but uncertainties like trade tensions could throw us off track, high leverage an amplifying factor

Wilkins: High household debt is our number on domestic financial vulnerability Canada does not have same debt to quality issues that US had before 2008 crisis

Wilkins: Public debt in certain Euro area countries a concern, those with weak fundamentals more prone to distress

Wilkins: US and Japan make up largest share of public debt in advanced economies, but their debt poses less of a worry

Wilkins: Non-financial corporate debt poses a financial stability risk for China, could flow to Canada through lower demand for exports, lower commodity prices, turbulence to global financial markets

Wilkins: Investment funds, exchange traded funds a concern because we don’t know how these funds will react when an adverse shock hits

Wilkins: China taking action on more stringent regulation, financial sector supervision, but trade conflict makes delicate balancing act for authorities tougher

Wilkins: A stable debt to GDP ratio does not guarantee financial stability, credible macroeconomic framework critical to maintaining faith in government credit worthiness, achieving growth

Canadian banks face significant risk, report states – NPW

KRW:

  1. Korea mulls suspending denuclearization talks with US – Tass

 

 

Today’s Data

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

JPY         BoJ Rate Decision A | C -0.10% | P -0.10%

NZD       BusinessNZ Manufacturing PMI Feb A 53.7 | P 53.1 | R 53

10:00     EUR        Eurozone CPI M/M Feb C 0.30% | P -1.00%

10:00     EUR        Eurozone CPI Y/Y Feb (F) C 1.50% | P 1.40%

10:00     EUR        Eurozone CPI Core Y/Y Feb (F) C 1.00% | P 1.00%

12:30     CAD       Manufacturing Sales M/M Jan C 0.40% | P -1.30%

12:30     USD       Empire State Manufacturing Index Mar C 10 | P 8.8

13:15     USD       Industrial Production M/M Feb C 0.40% | P -0.60%

13:15     USD       Capacity Utilization Feb C 78.50% | P 78.20%

14:00     USD       U. of Mich. Sentiment Mar (P) C 95.6 | P 93.8

 

Harry Hindsight

  • GBP: Opening around the 1.3335 level the market drifted through to the grey hours falling steadily to the 1.3240 area before finding a base, the move into the grey hours saw quick buying before the early London traders sat down and the market managed to recover to just below 1.3300 level for the London opening, A quick stab to the opening levels and then the market dropped back just as quickly and eventually slipped through the 1.3220 before holding around the level and finding a base for the day, a choppy session through the day with the market making brief attempts pushing too the 1.3285 levels and although through the NYK session the market tested to the level 3 times it was unable to break and the final move saw the market quickly back at the baseline for the move to the close.
  • JPY: A slow start for the USDJPY with the market initially moving to the 111.30 areas before dipping back to test through the 111.20 level, fixing demand took the market steadily higher and the market tested to the 111.35 level before pausing however, the rally continued and the push to the London session saw the market pressing the 111.65 areas, London managed a minor test to the 111.70 areas and a slow sideways move through to the end of London before pushing through to the 111.80 levels, the market drifted through to the close holding around the 111.70 areas to the close.
  • AUD: The Oz opened on its highs holding quietly through to the Tokyo session dipping from the early highs and falling back from the 0.7098 areas and falling back through into the Tokyo session to hold the 0.7070 levels for a period before drifting through to the grey hours falling back to the 0.7060 level, early London didn’t do very much for the first hour before again dropping back through to the 0.7040 areas, the market then traded slowly through to the close moving quietly to recover to the 0.7065 area.
  • EUR: Initially moving from the 1.1325 area to the 1.1338 level the market then drifted on the move into the Tokyo session dipping back to the early lows pausing and then slipping through to the grey hours in a slow move to the 1.1312 levels, early London took the market through to the highs once again before dropping quickly through to the 1.1300 levels and holding around the level through to the close.

 

Yesterday’s Premiership results

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%

CHF        SECO Economic Forecasts

EUR        German CPI M/M Feb (F) A 0.50% | C 0.50% | P 0.50%

EUR        German CPI Y/Y Feb (F) A 1.50% | C 1.60% | P 1.60%

CHF        Producer & Import Prices M/M Feb A 0.20% | C -0.10% | P -0.70%

CHF        Producer & Import Prices Y/Y Feb A -0.70% | C -1.00% | P -0.50%

CAD       New Housing Price Index M/M Jan A -0.10% | C 0.00% | P 0.00%

USD       Import Price Index M/M Feb A 0.60% | C 0.30% | P -0.50% | R 0.10%

USD       Initial Jobless Claims (MAR 09) A 229K | C 225K | P 223K

USD       New Home Sales Jan A 607K | C 623K | P 621K | R 652K

USD       Natural Gas Storage A -204B | C -211B | P -149B

 

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