Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 108.942 | EURUSD 1.10313 | AUDUSD 0.67212 | NZDUSD 0.64845 | USDCAD 1.32086 | USDCHF 0.96948 | GBPUSD 1.3092

LMAX highs and Lows 06.00 GMT
Highs | Lows
EURUSD 1.10362 | 1.10223
USDJPY 109.136 | 108.881
GBPUSD 1.31055 | 1.30795
USDCHF 0.97076 | 0.96941
AUDUSD 0.67283 | 0.67062
USDCAD 1.32134 | 1.31959
NZDUSD 0.64943 | 0.64783
EURCHF 1.07039 | 1.06971
EURGBP 0.84331 | 0.84159
EURJPY 120.400 | 120.083

For Today
• GBP: The move into the Tokyo opening saw the low of the session and only just below the opening around the 1.3085 level rising through to the 1.3105 level in a steady move before ranging around the 1.3100 level through into the grey hours, Downside bids remain into the 1.3000 levels with limited congestion from current levels through to the weak stops through the level are likely to run into congestion on a dip to the 1.2950 area with stronger bids likely in that area, Topside congestion through to the 1.3200 levels with strong offers likely in that area with weak stops on a push through the 1.3220 area and opening the market to a run to the 1.3300 level and stronger offers reappearing in the area.
• JPY: A slow drift from the opening testing back from the 108.95 areas to push lightly through into the Tokyo session holding just below the 108.80 level before Tokyo moved in and slowly pushed through to the 109.10 level to range between the 109.00-10 level through into the grey hours, Topside congestion into the 110.00 level but likely to be limited with stronger congestion into the 110.50 level and likely to increase the closer the market moves to the 110.80 area where stronger offers start to appear leading into stronger congestion on any push to the 111.00 level, downside congestion likely mixed with weak stops on a move through the 108.80 area however, any push through to the 108.50 area is likely to see stronger congestion from there onwards.
• AUD: Limited range through the session with the market opening just above the 0.6720 levels before steadily dropping into the Tokyo session to make the lows just above the 0.6705 area, renewed interest in buying the AUDJPY cross saw the Oz touch through to the 0.6730 level before drifting back into the 0.6710-20 areas for the move through to the grey hour favouring the topside of the range, downside bids continue to remain through to the 0.6700 area with possible option related interest in the area and strong stops likely on any dips through the 0.6680 level opening up a deeper move over a long period with bids likely to appear around the sentimental 00/50 areas, topside offers light through to the 0.6780 level with strong offers likely to increase into the 0.6800/20 area with weak stops appearing through the level and 0.6840-60 likely to be stronger.
• EUR: A steady drift through the Asian session with the market opening around the 1.1030 level testing to the 1.1035 area before running into the Tokyo session, it rallied lightly and then fell away again and eventually testing into the low 1.1020’s before holding quietly through to the grey hours holding just above the lows. Downside bids cleared into the 1.1000 level however, option barriers remain likely and not until the market break through the 1.0980 levels will it likely disappear with stops likely appearing if not option related sellers, opening a dip through to the 1.0950 level before stronger bids start to appear in the market, topside offers light through to the 1.1080 level with stronger offers beginning to build in the area with congestion through the 1.1100 areas and weak stops awaiting beyond the 1.1120 level for a run to the 1.1150 areas.

Overnight News
WHO:
Declares international health emergency – BBG
CNY:
China prepares for spike in infections during travel crunch – Strait Times
Chinese Cities and Provinces extend holiday on Virus outbreak – BBG
NZD:
NZ Consumer confidence eased in January – ANZ – BBG
USD:
The US recorded its first human to human spread of the Coronavirus – FRONTLINE
Tells American’s not to travel to China – BBG
JPY:
Tells citizens to avoid unnecessary travel to China – BBG

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
JPY Jobless Rate (DEC) A 2.20% | C 2.30% | P 2.20%
JPY Industrial Production YoY (DEC P) A -3.00% | C -3.60% | P -8.20%
JPY Large Retailers Sales (DEC) A 3.00% | C -2.50% | P 1.80%
JPY Retail Trade YoY (DEC) A -2.60% | C -1.70% | P -2.10%
GBP GfK Consumer Confidence (JAN) A -9 | C -9 | P -11
AUD Private Sector Credit YoY (DEC) A 2.40% | C 2.30% | P 2.40%
CNY Manufacturing PMI A 50 | C 50 | P 50.2
CNY Composite PMI (JAN) A 53 | P 53.4
CNY Non-Manufacturing PMI (JAN) A 54.1 | C 53 | P 53.5
JPY Construction Orders YoY (DEC) A 21.4% | P -1.2%
JPY Housing Starts YoY (DEC) A -7.9% | C -11.80% | P -12.7%
EUR Germany Sovereign debt to be rated by Moody’s
0630 EUR French GDP YoY (4Q P) C 1.20% | P 1.40%
0700 EUR German Retail Sales YoY (DEC) C 4.50% | P 2.80%
0730 CHF Retail Sales Real YoY (DEC) P 0.0%
0900 EUR Italian GDP w.d.a. YoY (4Q P) C 0.30% | P 0.30%
0900 EUR Italian GDP w.d.a QoQ (4Q P) C 0.10% | P 0.10%
0930 GBP Consumer Credit YoY (DEC) P 5.7%
0930 GBP Mortgage Approvals (DEC) C 65.6k | P 65.0k
0930 GBP Net Consumer Credit (DEC) C 0.9b | P 0.6b
0930 GBP Net Lending Sec. on Dwellings (DEC) C 4.1b | P 4.1b
1000 EUR Eurozone CPI Core YoY (JAN P) C 1.20% | P 1.30%
1000 EUR Eurozone CPI Estimate YoY (JAN) C 1.40% | P 1.30%
1000 EUR Eurozone GDP s.a. YoY (4Q A) C 1.10% | P 1.20%
1000 EUR Eurozone CPI MoM (JAN P) C -0.90% | P 0.30%
1000 EUR Eurozone GDP s.a. QoQ (4Q A) C 0.20% | P 0.20%
1330 CAD GDP YoY (NOV) P 1.2%
1330 CAD GDP MoM (NOV) P -0.1%
1330 USD PCE Core YoY (DEC) C 1.60% | P 1.60%
1330 USD Employment Cost Index (4Q) C 0.70% | P 0.70%
1330 USD PCE Core MoM (DEC) C 0.10% | P 0.10%
1330 USD Personal Income (DEC) C 0.30% | P 0.40%
1330 USD Personal Spending (DEC) C 0.10% | P 0.30%
1330 USD Real Personal Spending (DEC) C 0.10% | P 0.30%
1445 USD Chicago Purchasing Manager (JAN) C 48.9 | P 48.9
1500 USD U. of Mich. Sentiment (JAN F) C 99.1 | P 99.1
1800 USD Baker Hughes US Rig Count (JAN 31) P 794

Harry Hindsight

• GBP: Opening around the 1.3010 area the early market pushed slowly through to the 1.3020 closing area and continued lightly rising through into early Tokyo to test the 1.3025 level before drifting through to the 1.3015 level over several hours and the grey hours, steady selling to again push the market through the 1.3000 level however, downside congestion eventually turned the market on the move into early London and started a steady push back to the highs from the 1.2980 level lows the move through towards NYK session saw the market rallying quickly higher as the BoE announced a hold as opposed to media chatter of a rate cut, the market slowed as it pushed through the 1.3075 level however, it did continue to rise pushing through the 1.3100 level into the NYK session to test to the 1.3105 area the market slipped a little before running a second time and tested the highs again before settling back to drift around the 1.3085 area through to the close.
• JPY: Very limited movement through the Asian session with continuing safe haven flows pushing the USDJPY steadily from the opening highs around the 109.10 level and drifting through into the London session holding just above the 108.80 areas and then ranging through to NYK quietly around the 108.90 level, the run to the London close saw the market pushing through the 108.80 level and a few week stops helping the market through to the 108.60 lows of the day before slowly moving into the final hour rising a quick push from the 108.70 level saw the market only slightly in the red for the close.
• AUD: Opening close to its highs early trading took the market just above the 0.6754 area before slipping back as the Tokyo session saw the market drifting through to the 0.6740 area before briefly holding, the market again ran lower to hold the 0.6730 area in weak trading through the Asian session the move into the grey hours saw the market test towards the 0.6720 level and then range through the London session into NYK around 0.6730 again, NYK sold quietly through to set the lows just above the 67 cents level showing a little wider range to the close before forcing its way to the 0.6720 area.
• EUR: Opening around the 1.1010 level the market struggled for direction during Asia making the lows in the grey hours, the market then started a slow rise once London moved in and slowly pushed through the balance of the day pushing towards the 1.1040 level and ranging in a long run to the close around the 1.1035 level.

Yesterday’s Premiership results
NZD Trade Balance (DEC) A 547m | C 100m | P -753m
NZD Trade Balance 12mth YTD (DEC) A -4309m | C -4725m | P -4816m
JPY Loans and Discounts Corp YoY (DEC) A 1.79% | P 2.02%
CHF KOF Leading Indicator (JAN) A 100.1 | C 97.0 | P 96.4
EUR German Unemployment Change (000’s) A -2k | C 5.0k | P 8.0k
EUR German Unemployment Claims rate s.a. (JAN) A 5.00% | C 5.00% | P 5.00%
EUR Eurozone Unemployment Rate (DEC) A 7.40% | C 7.50% | P 7.50%
GBP BoE Asset Purchase Target (JAN) A 435b | C 435b | P 435b
GBP BoE Rate (JAN 30) A 0.75% | C 0.75% | P 0.75%
GBP Carney speaks at press conference in London
EUR German CPI YoY (JAN P) A 1.7% | C 1.70% | P 1.50%
EUR German CPI EU Harmonized YoY (JAN P) A 1.6% | C 1.70% | P 1.50%
EUR German CPI Index MoM (JAN P) A -0.60% | C -0.60% | P 0.50%
EUR German CPI Index EU Harmonized MoM (JAN P) A -0.80% | C -0.70% | P 0.60%
USD GDP Annualized QoQ (4Q A) A 2.1% | C 2.1% | P 2.1%
USD Continuing Claims (JAN 18) A 1703k | P 1731k
USD Core PCE QoQ (4Q A) A 1.3% | C 1.60% | P 2.10%
USD Gross Domestic Product Price Index (4Q A) A 1.5% | C 1.80% | P 1.80% | R 1.70%
USD Initial Jobless Claims (JAN 25) A 216k | C 214k | P 211k
USD Personal Consumption (4Q A) A 1.80% | C 2.20% | P 3.20%

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