Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 110.099 | EURUSD 1.08735 | AUDUSD 0.67371| NZDUSD 0.64629 | USDCAD 1.32496 | USDCHF 0.97831 | GBPUSD 1.29597

LMAX highs and Lows 06.00 GMT
Highs | Lows
EURUSD 1.08764 | 1.08653
USDJPY 110.091 | 109.803
GBPUSD 1.29633 | 1.29442
USDCHF 0.97870 | 0.97759
AUDUSD 0.67381 | 0.67071
USDCAD 1.32599 | 1.32418
NZDUSD 0.64677 | 0.64308
EURCHF 1.06367 | 1.06276
EURGBP 0.83969 | 0.83871
EURJPY 119.680 | 119.385

For Today
• GBP: Limited range through the early part of the session with the market moving around the opening level initially dipping through to the 1.2953 area before then rising back to the opening high to the 1.2965 and continuing to range but with a narrowing movement until late into the session finally pushing through the 1.2950 level and holding the area through to 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 just below the 110.10 level saw the market moving through quietly into the Tokyo opening and a quick drop through to the 109.80 level before bouncing a little and then slowly creeping back towards the 110.00 level through into midsession, after holding for an hour before slowly slipping back to the 109.85 areas for the move into the grey hours, 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: While there was very little news for the Oz or the JPY the cross saw early Tokyo selling moving through and the market in the Oz dropped quickly back from the early highs around the 0.6740 level to test quickly below 0.6710 before finding some slow steady buyers to push through to the 0.6730 area only to repeat the USDJPY recovery and slowly slip back to move into the grey hours around the 0.6715 area, 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: A Very quiet session for the Euro with a distinct lack of interest in Asia for the piece, opening just short of the highs the market tested into the Tokyo session pressing the 108.75 level before drifting through the session to test towards the 1.0865 level and the range set and the market running to the grey hours holding just off the lows. Yesterdays break through to the late 2017 early 2018 range opens up the downside for further testing with the market likely to see sentimental bids around the 1.0850 area and the market then opening to the 108.00 level and possibly stronger congestion protecting that level, weak stop likely to be light on a test through to the 1.0780 area with stronger congestion likely to reappear for any test to the 1.0760-40 area. Topside offers light through to the 1.0900 area with weak stops likely on a push through the 1.0920 area and possibly a short squeeze through to the 1.0980 level before stronger offers then appear through to the 1.1000 level.

Overnight News
USD:
Coronavirus test kits sent to parts of the US are flawed CDC says – NYT
AUD:
S&P Says Coronavirus unlikely to hurt Australia’s sovereign rating – BBG
NZD:
RBNZ’s Hawkesby: Rates on hold at record low for a long time – BBG
Hawkesby: Inflation above 2% would be healthy
Hawkesby: Comfortable using full 1-3% inflation range – BBG
Hawkesby: RBNZ has genuine neutral bias on interest rates
Hawkesby: Expect Labour market to soften, low rates will support – BBG
Hawkesby sees Household consumption gains boosting growth in 2h – BBG
RBNZ’s Coronavirus is a downside risk to outlook
Orr: Low rates remain necessary
Orr: We are seeing monetary policy work
Orr: Government fiscal spending also gives us confidence
GBP:
Coronavirus ninth case diagnosed in UK as virus spreads in London – SKY

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
AUD Consumer Inflation Expectation (FEB) 4.0% | P 4.7%
GBP RICS House Price Balance A 17.0% | C 3.0% | P 0.0%
AUD RBA Governor Lowe Participate in Panel
0700 EUR German CPI YoY (JAN F) C 1.7% | P 1.7%
0700 EUR German CPI EU Harmonized YoY (JAN F) C 1.6% | P 1.6%
1000 EUR European Commission Publishes Winter Forecasts
1330 USD CPI YoY (JAN) C 2.5% | P 2.3%
1330 USD CPI Ex Food and Energy YoY (JAN) C 0.2% | P 0.2%
1330 USD Continuing Claims (FEB 1) C 1748k | P 1751k
1330 USD Initial Jobless Claims (FEB 8) C 210k | P 202k
1330 USD Real Avg Hourly Earning YoY (JAN) P 0.6%
1330 USD Real Avg Weekly Earnings YoY (JAN) P 0.0%
1500 USD Senate Panel Holds Hearing for Fed Nominees Shelton, Waller
1900 MXN Overnight rate (FEB 13) C 7.0% | P 7.25%
2130 NZD BusinessNZ Manufacturing PMI (JAN) P 49.3

Harry Hindsight

• GBP: opening around the 1.2955 area and after some movement closing around the same level, quiet through to the Tokyo session and from the Tokyo fix the market pushed steadily towards the 1.2970 level before drifting back through into the grey hours to test towards the early low 1.2950 area, early London started the buying and the market pushed quickly above the 1.2965 areas and then a steady rise through to the 1.2990 level before dipping a little into the NYK opening and bouncing for a test through the 1.2990 level to make the high around the 1.2991 level dropping back quickly as USD went bid with the Powell testimony, falling back to the lows, while the market saw another push through to the 1.2980 area it was unable to maintain the push and drifted through to the close.
• JPY: Rising steadily from the opening the market pushed off the 109.80 level and tested through to mid-session pushing the 109.90 area and then held quietly through to the grey hours around the 10985 area, the move into the London session saw late Asian buying pushing through and the market quickly pushing through to just below the 110.15 area before dipping back to range quietly through to the NYK session around the figure area, a late rally saw a limited push to make the close around the 110.10 level.
• AUD: A quiet start for the day pushing through to early Tokyo before lifting off the 0.6715 area and testing above the 0.6720 area, drift and the Tokyo fix saw JPY weakness and the Oz pushing through to the 0.6730 area with a slow rise through to test above the 0.6735 level before holding quietly just off the highs through to the London opening, London were steady buyers through to just short of the 0.6750 level and a quiet range through to late in the session around the 0.6740-50 area before slipping a little to the close.
• EUR: Opening around the 1.0915 area the market held in a tight range through to the grey hours before slipping lower for the move into the London session where buyers appeared to take the market to the 109.25 area to make the high of the day, a slow drift through to the early part of the NYK session dipping on the break through the 1.0910 level and the second run at the figure level saw the market push through easily and paused at the 1.0880 level before dipping to the lows just above the 1.0865 level and only a limited rally for the move into the close.

Yesterday’s Premiership results
NZD RBNZ Official Cash Rate (FEB 12) A 1.00% | C 1.00% | P 1.00%
NZD RBNZ Governor News Conference After OCR Decision
JPY Machine Tool Orders YoY (JAN P) A -35.6%| P -33.5%
EUR Eurozone Industrial Production w.d.a. YoY (DEC) A -4.1% | C -1.9% | P -1.5%
USD MBA Mortgage Applications (FEB 7) A 1.1% | P 5.0%
USD Powell Testifies Before Senate Banking Panel
USD DOE US US Crude Oil Inventories (FEB 7) A 7459k | P 3355k
USD Monthly Budget Statement (JAN) A -33.0b | C 6.2b | P -13.3b
NZD Governor at Parliament Select Committee on MPS

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