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Andy Harrison

Good Morning,

For Today
• GBP: A slow steady rise from the 1.2885 area through to test the 1.2895 and holding quietly through to the grey hours, Downside bids remain around the 1.2880 level with possible weak stops appearing on a strong move through, congestion through to the 1.2850 area and increasing around the level before lessening until close to the 1.2800 level and likely to be stronger, a dip below will likely see some stops appearing and the market open to the 1.2760 area where stronger bids are expected. Topside offers light through to the 1.3000 level and possibly with increased offers forming through to the 1.3050 level with limited stops likely for the time being.
• JPY: A very quiet session for the USDJPY with the market opening around the 112.10 level and after a brief dip into the Tokyo session some early buying from the 111.95 areas to test towards the 111.20 for the Tokyo fix before slipping slowly through the mid part of the session to make the lows just through the 111.95 area and then holding quietly through to the grey hours around the 112.00 areas, Topside offers remain through to the 112.20/25 area remain and seem to be fairly strong and possibly option related so a push through could see some weak stops and a move through the congested area into the 112.50 level with increasing offers likely on any test through to the 112.80-113.00 area and stronger stops likely if the market can push beyond the 113.20-30 area. Downside bids light through to the 111.00 area with possible weak bids into the level with strong stops likely on a move through the level and opening the chance of a quick test through to the low 110.20-00 area as the market readjusts to these levels,
• AUD: Pushing through quietly into the Tokyo session saw the market rising through to the 0.6620 area before starting a slow drift through grinding the bids out of the way for the push through the 66 cents level and testing just below the 0.6595 area to set the low and rising only to base along the 66 cents level to the grey hours, Downside bids into the 0.6580 level and likely weak stops possibly joined by breakout stops however, congestion likely to be around the sentimental levels much the same as the gradual climb higher 11yrs ago, however, this does open the 2009 lows as a target for the long term. Topside offers likely to be light through to the 67 cents area with some light congestion possible around the area before opening to the 0.6740-60 levels and the stronger offers likely to be seen, with limited offers until the 0.6800-20 area and limited congestion again, this being said the chances of a short squeeze are very limited.
• EUR: Opening on its lows for the day so far the market saw steady buying pushing through to the 1.0795 area before holding quietly around the 1.0790 through to late in the session before renewing a slow rise through the 1.0795 area for the move into the grey hours, Downside bids still remain into the 1.0780 level however, much of the congestion is now cleared and a move through the level is likely to see weak stops opening a test through to the 1.0760-40 areas and likely further congestion and possibly increasing into the 1.0720-00-1.0680 level before stronger stops start to appear and opening a larger move lower. Topside offers light through to the 108.20 level with offers rebuilding from yesterdays attempt to breakout at the level and light congestion through the 1.0840-60 level and likely only to increase into the 1.0880 levels for any attempt at the 1.0900.

Overnight News
CNY/EUR:
Most of China-Europe Freight trains have been halted in February – The Business Source
CNY:
Dominoes falling in global shipping as Coronavirus continues to grip China’s economy – TEL
China car sales slump 92% in first half of February on Virus – BBG
China finds spike in Coronavirus cases in two jails – RTRs
JPY:
Tokyo to cancel or postpone major indoor events for next 3 weeks
BoJ Governor sees moderate economic growth, eyes coronavirus impact
Japan’s factory activity shrinks at fastest pace since 2012 on coronavirus jolt
NZD:
Orr: Continuing to assess how to run policy if rates reach zero
Orr: Record low global rates are a challenge
Orr: RBNZ needs to be prepared for the unanticipated
Orr: RBNZ in favourable position with cash rate at 1%

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
2200 AUD CBA Australia PMI Composite (FEB P) A 48.3 | P 50.2
AUD CBA Australia PMI Manufacturing (FEB P) A 49.8 | P 49.6
AUD CBA Australia PMI Services (FEB P) A 48.4 | P 50.6
JPY National CPI YoY (JAN) A 0.7% | C 0.7% | P 0.8%
JPY National CPI Ex-Fresh Food YoY (JAN) A 0.8% | C 0.8% | P 0.7%
JPY National CPI Ex-Fresh Food, Energy YoY (JAN) A 0.8% | C 0.8% | P 0.9%
JPY Nikkei Japan PMI Manufacturing (FEB P) A 47.6 | P 48.8
JPY All Industry Activity Index A 0.0% | C 0.3% | P 0.9%
CHF Switzerland Sovereign Debt to be rated by S&P
EUR France Sovereign debt to be rated by Moody’s
0830 EUR Markit Germany Services PMI (FEB P) C 53.9 | P 54.2
0830 EUR Markit/BME Germany Composite PMI (FEB P) C 50.8 | P 51.2
0830 EUR Markit/BME Germany Manufacturing PMI (FEB P) C 44.8 | P 45.3
0900 EUR Markit Eurozone Composite PMI (FEB P) C 51.0 | P 51.3
0900 EUR Markit Eurozone Manufacturing PMI (FEB P) C 47.5 | P 47.9
0900 EUR Markit Eurozone Services PMI (FEB P) C 52.3 | P 52.5
0930 GBP Central Government NCR (JAN) P 15.6b
0930 GBP Markit UK PMI Manufacturing s.a. (FEB P) C 49.7 | P 50.0
0930 GBP Markit/CiPS UK Composite PMI (FEB P) C 52.8 | P 53.3
0930 GBP Markit/CIPS UK Services PMI (FEB P) C 53.4 | P 53.9
0930 GBP PSNB Ex Banking Groups (JAN) C -11.4b | P 4.8b
0930 GBP Public Finances (PSNCR) (JAN) P 16.6b
0930 GBP PSNB (JAN) C -12.0b | P 4.0b
1000 EUR Eurozone CPI Core YoY (JAN) C 1.4% | P 1.4%
1000 EUR Eurozone CPI Core YoY (JAN F) C 1.1% | P 1.1%
1330 CAD Retail Sales MoM (DEC) C 0.1% | P 0.9%
1445 USD Markit US Composite PMI (FEB P) P 53.3
1445 USD Markit US Manufacturing PMI (FEB P) C 51.5 | P 51.9
1445 USD Markit US Services PMI (FEB P) C 53.5 | P 53.4
1500 USD Existing Home Sales MoM (JAN) C -1.7% | P 3.6%
1800 USD Baker Hughes US Rig Count (FEB 21) P 790

Harry Hindsight

• GBP: Opening around the 1.2920 level the market saw a limited rise through into the Tokyo session to test towards the 1.2930 level and the high for the day, having hit those highs and unable to push on the market started to drift once the Tokyo fix was over with and slipped steadily over several hours to test the 1.2900 level into midsession recovering only marginally before moving into the grey hours pushing through to the 1.2885 level and holding through into the London opening before rallying quickly on the release of the Retail sales number, the rally was short lived testing towards the 1.2925 area before dropping back quickly 59 push through the lows and once the 1.2880 level broke weak stops were triggered for a quick test too the 1.2850 areas and based in a 25 pip range through to early morning in NYK before rising back to the 1.2880 level and ranging steadily through to the close around that level.
• JPY: Opening around the 111.35 area saw the market slide a little through into the Tokyo session testing around the 111.10 level to make the lows of the day and starting to rally once the Tokyo fix was over, a steady push through to the 111.50 level before coming to a stop and holding around the 111.40 areas through to the grey hours, early London were quick buyers pushing the market through to the 111.85 area and then a pause as the market struggled with the congestion in the area before again starting the rally after a couple of hours and pushing steadily in a tight channel through to the 112.20 level before reversing quickly in a limited dip back to the 111.80 area, the move into the NYK session saw the market again pushing for the 112.20 area a light test above saw the highs of the day however, the level held again and the market dipped into the London close testing through to the 111.70 triggering very weak stops on the dip through before slowly rising through to the 112.10 areas once London was out of the way and holding in a quiet run to the close.
• AUD: Running from the opening to test to the 0.6695 area to make the high of the day before the employment numbers were released and a quick dip through to the 0.6670 level on the headline 5.3% Unemployment rate, once the Tokyo fix was over the Oz started to drop back to the 0.6650 areas before slowing its descent but continuing through to the 0.6625 area before stopping and reversing to the 0.6650 area for the move into the grey hours, slow selling then continued through into early part of the London session testing the lows again and testing to the 0.6615 area, a slow grind through to the close with limited attempts to break the 0.6610 area but holding to the close in a long run.
• EUR: Euro’s opened quietly holding around the 1.0810 area before making early highs around the 1.0815 areas before running into early Tokyo holding the area before the end of the Tokyo fix quickly dropping down to the 1.0800 level and then after a brief flirtation with the 1.0790 areas held just below the 1.0800 area through to the grey hours, European selling saw the market dipping through to the 1.0780 area and a slight dip on what looked like stop hunting by the market the sellers were short lived and covered on a break back above the 1.0790 and a small rise through to the 1.0805 areas before slipping back to the 1.0790 areas for the move into the NYK session and buyers reappearing and seeing a strong rally through to the 1.0820 areas to hold for a brief period before dropping straight back to the 1.0780 area with a limited bounce and then a slow drift through to the close just holding above the lows for that close.

Yesterday’s Premiership results
AUD Employment Change (JAN) A 13.5k | C 10.0k | P 28.9k
AUD Unemployment Rate (JAN) A 5.3% | 5.2% | P 5.1%
AUD Full Time Employment Change (JAN) A 46.2k | P -0.3k
CNY 1-year Loan Prime Rate (FEB) A 4.05% | C 4.05% | P 4.15%
CNY 5-year Loan Prime Rate (FEB) A 4.75% | C 4.75% | P 4.80%
EUR German GfK Consumer Confidence A 9.8 | C 9.8 | P 9.9
CHF Industrial Output w.d.a. YoY (4Q) A 1.6 | P 8.0% | R 7.9%
GBP Retail Sales ex Auto Fuel YoY (JAN) A 1.2% | C 0.5% | P 0.7%
EUR Publication of account of ECB’s Monetary Policy Meeting (JAN)
USD Continuing Claims (FEB 8) A 1726k | C 1717k | P 1698k | R 1701k
USD Initial Jobless Claims (FEB 15) A 210k | C 210k | P 205k | R 206k
USD Philadelphia Fed Business outlook (FEB) A 36.7 | C 11 | P 17
EUR Eurozone Consumer Confidence (FEB A) A -6.6 | C -8.2 | P -8.1
USD Leading Index (JAN) A 0.8% | C 0.4% | P -0.3%
USD DOE US Crude Oil Inventories (FEB 14) A 415k | P 7459k

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