Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 109.764 | EURUSD 1.09456 | AUDUSD 0.66746 | NZDUSD 0.64022 | USDCAD 1.33058 | USDCHF 0.97764 | GBPUSD 1.28848

LMAX highs and Lows 06.00 GMT
Highs | Lows
EURUSD 1.09573 | 1.09429
USDJPY 109.874 | 109.566
GBPUSD 1.29076 | 1.2883
USDCHF 0.97825 | 0.97636
AUDUSD 0.67059 | 0.66665
USDCAD 1.33116 | 1.3290
NZDUSD 0.64166 | 0.63946
EURCHF 1.07108 | 106.935
EURGBP 0.84953 | 0.84873
EURJPY 120.321 | 119.996

For Today
• GBP: Opening a touch higher the market slowly rose from the 1.2890 area steadily testing through the 1.2900 level in quiet trading through to midsession, the market then drifted a little before rising to its highs as the market pushes towards the 1.2910 level into the grey hours, Topside offers light back through the 1.3000 level with some limited congestion on a test to the 1.3050 area but the market only lightly defended then through to the 1.3150 area with limited stops through the 1.3100 areas, downside bids strong through into the 1.2900 level however, weak stops growing behind the level and limited congestion through to the 1.2850 level and increasing only once the market moves through the area to head for the 1.2800 area.
• JPY: Opening a little lower around the 109.70 area before rising into early Tokyo to fill the small gap and then immediately dipping to the lows into the mid 109.50’s, the move into the Tokyo session saw the market starting a slow rise through to test just short of the 109.90 level before drifting from midsession to move into the grey hours holding the 109.75 area. Topside offers likely to be limited with weak stops on a push through the 110.20 area and opening up limited room through to the 110.50 and increasing resistance as the market approaches the 111.00 areas, downside bids light through to the 109.00 area with limited support and weak stops likely to be light for a move back to the stronger 108.50 area with good support likely to appear on any dips to the 108.00 levels.
• AUD: AUD opened slightly loser and once into the Tokyo session it moved off the 0.6670 area lows to run steadily through to the 0.6700 area, peaking at the 0.6705 levels before drifting back to range around the figure for the move into the grey hours, downside bids cleared through to 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: Opening unchanged the market held around the 1.0945 area through into the Tokyo session before starting a slow rise through the 1.0950 level and ranging tightly in the area through to late in the session before pushing for the 1.0960 level for the move into the grey hours, downside bids into the 1.0940 areas and probably sufficient congestion around the sentimental level to hold however, failing that the market is likely to see stronger bids appearing on any push through to the 1.0900 level where any weakness will likely see a deeper move. Topside offers light through to the 1.1040 area with limited congestion then appearing through to the 1.1070 level where stronger offers are suspected.

Overnight News
CNY:
Virus may have infected 500,000 in Wuhan by peak in coming weeks – BBG
China’s leading LNG Importer, claims the Coronavirus has made fulfilling contracts impossible
TRY:
Turkey lowers banks fx swaps with non-resident investors – BBG

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
JPY Bank Lending Ex-Trusts YoY (JAN) A 2.0% | P 1.9%
JPY Bank Lending incl Trusts YoY (JAN) A 1.9% | P 1.8%
JPY Housing Loans YoY (4Q) A 2.8% | P 2.9%
JPY Trade Balance – BOP Basis (YEN) (DEC) 120.7b | C 28.0b | P -2.5b
CNY New Yuan Loans CNY (JAN) C 3100.0b | P 1140.0b
CNY Aggregate Financing CNY (JAN) C 4250.0b | P 2100.0b
CNY Foreign Direct Investment YoY (JAN)
NZD REINZ House Sales YoY (JAN) P 12.3%
CNY CPI YoY (JAN) A 5.4% | C 4.9% | P 4.5%
CNY PPI YoY (JAN) A 0.1% | C 0.0% | P -0.5%
JPY Eco Watchers Survey Current A 41.9 | C 39.1 | P 39.8
JPY Eco Watchers Survey Outlook A 41.8 | C 43.8 | P 45.4 | R 39.7
0645 CHF Unemployment Rate (JAN) C 2.6% | P 2.5%
0645 CHF Unemployment Rate s.a. (JAN) C 2.3% | P 2.3%
0730 CHF CPI EU Harmonized YoY (JAN) C 0.1% | P -0.1%
0730 CHF CPI YoY (JAN) C 0.2% | P 0.2%
0730 CHF CPI Core YoY (JAN) C 0.4% | P 0.4%
1315 CAD Housing Starts (JAN) C 205.0k | P 197.3k
1330 CAD Building Permits MoM (DEC) C 2.8% | P -2.4%
2100 NZD NZ Government 6-month Financial Statements

Harry Hindsight

• GBP: A slow rise from the opening around the 1.2930 level to push through into the Tokyo session trading just above the 1.2940 level and holding in the area through to the end of the grey hours before drifting through to the 1.2920 into the London session, the move through the London session saw the market holding around the opening levels and testing into the NYK session pushing lightly through the 1.2950 level, USD started to move around a little as the market eventually saw USD quickly rising and the Cable dropping quickly back to the 1.2900 level and eventually force its way through and slowly testing through to the 1.2880 areas for the run to the close.
• JPY: Choppy at times however, generally contained in the 109.60-110.00 level with minor breaks in either direction, opening around the 110.00 level forcing to the highs of the day just above the 110.00 level before moving into the Tokyo session before dropping back through to the 109.80 level before recovering to the 109.90 and holding through to the grey hours, London took the market towards the highs again but only for a short period before drift back to the 109.90 areas and then slipping in midmorning to quickly test through the 109.70 area only to bounce and slowly rise through to the 109.90 level with a small spike to the 110.00 level, and the rise in unemployment in the US saw the market drop quickly back to the lows just above the 109.50 areas, holding for an hour before Fed release helped the market to recover through to the 109.80 area for a long drawn out run to the close.
• AUD: Opening around the 0.6930 area the market ran slightly higher with the weakening JPY to test through to the 0.6735 level before dipping in the same manner to hold around the 0.6720 area through to the London session, London were steady sellers of USDJPY trading slowly through to the 0.6670 in a very tight channel to hold just off the lows through to the NYK session, early NYK saw the lows for the day after the unemployment US number dipping through towards the 0.6660 level before steadily recovering a little to test the 0.6690 level before drifting and holding around the mid 0.6670’s through to the close.
• EUR: Holding quietly through the Asian session having opened around the 1.0980 level there was a slight rise through to the 1.1085 area to make the highs before drifting back to the opening for the move into the London session, steady selling in a tight channel through to the 1.0950 level saw some limited choppy movement through to late in the NYK session before USD buying moved in to set the lows just above the 1.0940 area and holding in the area to the close.

Yesterday’s Premiership results
AUD AiG Performance of Service Index (JAN) A 46.6 | P 48.7
AUD RBA’s Lowe Semi-annual Testimony to Parliament Committee
JPY Labour Cash Earnings YoY (DEC) A 0.0% | C -0.2% | P -0.2% | R 0.1%
JPY Overall Household Spending YoY (DEC) A -4.8% | C -1.6% | P -2.0%
JPY Real Cash Earnings YoY (DEC) A -0.9% | C -0.9% | P -0.9% | R -0.6%
AUD RBA Statement on Monetary Policy
NZD RBNZ 2 year inflation expectation A 1.93% | P 1.8%
JPY Coincident Index (DEC P) A | C 94.7 | P 94.7
JPY Leading Index CI (DEC P) A | C 91.3 | P 90.8
EUR Italy Sovereign debt to be rated by Fitch
EUR German IP n.s.a. and w.d.a. YoY (DEC) A -6.8% | C -3.7% | P -2.6% | R -2.5%
EUR German Trade Balance (DEC) A 15.2b | C 15b | P 18.3b
MXN CPI YoY (JAN) A 3.24% | C 3.28% | P 2.83%
MXN CPI MoM (JAN) A 0.48% | C 0.53% | P 0.56%
CAD Net Change In Employment (JAN) A 34.5k | C 17.5k | P 35.2k | R -2.8k
CAD Unemployment rate (JAN) A 5.5% | C 5.7% | P 5.6%
CAD Full Time Employment Change (JAN) A 35.7k | P 38.4k | R 33.9k
CAD Hourly Wage Rate Permanent Employees YoY (JAN) A 4.4% | P 3.8%
USD Change in Non-Farm Payrolls (JAN) A 225k | C 160k | P 145k
USD Unemployment Rate (JAN) A 3.6% | C 3.5% | P 3.5%
USD Average Hourly Earnings YoY (JAN) A 3.1% | C 3.0% | P 2.9% | R 3.0%
USD Average Weekly Hours all Employees (JAN) A 34.4 | C 34.3 | P 34.3
USD Change in Private Payrolls A 206k | C 150k | P 139k
USD Fed releases semi-annual Monetary Policy Report
USD Baker Hughes US Rig Count (FEB 7) A 790 | P 790
USD Consumer Credit (DEC) A 22.055b | C 15.000b | P 12.513b

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