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Andy Harrison

Good Morning,

For Today
• GBP: Rising slightly from the opening to test the 1.2895 area and hold around the 1.2890 level deep through into Tokyo the market started a slow drift as Tokyo Margined accounts came under pressure after the movements in equity indices yesterday, Cable started to drift lower through the midsession testing through to the 1.2870 before margin pressures seemed to ebb away and a slow rise from the lows through to the grey hours testing back to the 1.2890 level, Topside offers light through the 1.3000 area likely to fall easily on a push through to the 1.3020 area and only stiffening once the market pushes the 1.3050 area with congestion likely and increasing on any move to push the 1.3100 level with likely stronger offers. Downside bids cleared through 1.2900 level with buyers likely to reappear on any test to the 1.2850 with stronger congestion awaiting below the 1.2820-00 level and little in the way of stops for the moment.
• JPY: Gapping lower on the reopening to quickly test the 109.35 area the market held initially making its way into the Tokyo session filling the small gap and testing towards the 109.70 area, then Tokyo opened and it was all one way with the market running into light bids around the 109.35 rea and eventually slipping through and accelerating through to test through to the 108.90 level bouncing weakly before heading to the grey hours again pressing the lows, Downside bids light through to the 108.80 area with possible weak stops below however, given the shake up of the market these are likely to be very light, stronger bids likely on any push through to the 108.50 level and increasing on any test towards the 108.00 area.
• AUD: A slight dip from the opening saw the Oz test into the mid 0.6560’s before slowly pushing through to the 0.6580 area peaking just above the level and into Tokyo, and as with the USDJPY very little let up for the market as oz tested through the 0.6560 level and continued through to the 0.6540 area, a brief pause as the market drifted to the 0.6530 area before holding through to the final hour and a renewed round of selling and the Oz struggling to maintain the 0.6520 area. Downside bids close to hand with possible option plays around the 0.6500 area and weak stops on a dip through the 0.6480 level leaving the market vulnerable in the short term with stronger bids likely to reappear around the 0.6450 level and possible a little deeper with 0.6400 level a stronger buying area.
• EUR: Euro saw limited selling from the opening highs around the 1.1005 area pushing through into the Tokyo session unchanged and then a slow drift lower through to the 1.0985 area and even slower rise towards the 1.1000 level. Downside bids light through into the 1.0785 area before stronger bids reappear in strength with weak stops possible through the level and opening a test through the congestion around the 1.0750 level and opening a test to the 1.0720 areas and stronger bids, Topside offers through the 1.1000-20 area with likely weak stops on a push through the level and open a test through to the 1.1040-60 areas where stronger offers are possible, for the moment there doesn’t look to be a safe haven for funds with Italy and Spain seeing Virus cases increasing, any push beyond will likely run into ever increasing resistance through to the 111.00 areas and stronger offers likely.

Overnight News
JPY:
Japan is closing all its schools to prevent the spread of Coronavirus, forcing parents to take time off work – BDR
Japan Pension fund sheds bonds, bets Virus fears are overblown – BBG
With Margins squeezed the old adage Keep calm and carry on – JPM
USD:
Markets will start freezing up even if the Fed cuts rates – CNBC
A government whistle-blower alleges US health workers treated Coronavirus evacuees without proper protective gear or training – BDR
EUR:
Germany’s Scholz bids to ease debt brake in stimulus salvo – BBG
AUD:
Australia flags targeted stimulus as Coronavirus hits economy – BBG
NZD:
Confirms its first case of Coronavirus – Radio NZ
NZ Economists see increased risk of RBNZ rate Cut – BBG

Harry Hindsight

• GBP: Given some pairs Cable had a fairly stable day, with the market opening around the 1.2900 level and moving steadily higher through the Asian session testing into the Tokyo opening pushing the 1.2915 and eventually pushing through to the 1.2930 with the run to the grey hours seeing 1.2935 before dropping back steadily for the London opening, a quick rise as Boris beats a drum telling the EU if no change by June then its end of the line and the UK will go out on WTO basis and Cable quickly pushing through to the 1.2945 area having approached the opening level in the grey hours, however, that high was not repeated and dropped back quickly through to the 1.2870 area before stabilizing with the market testing the 1.2860 level and holding through to the NYK opening before a repeat rise through to the 1.2915 area, the market then dropped back to range through to the close with a wide 1.2065-12900 range narrowing down through the NYK session to hold around the 1.2890 level.
• JPY: USDJPY saw a steady trade lower through the Asian session opening just below the 110.45 highs and then slipping through to late into the session before dipping to test the 110.00 area and into the London session holding through to early morning before dipping a little through, for the most the market remained in the 110.00-20 level through to the NYK session before NYK moved in and steadily sold it down to the 109.70 area, the end of London saw the market rising again with a slow push to the 110.30 area before dipping slowly through to the close and making it to the 109.60 level. Coronavirus being the main cause with stock markets around the globe suffering from strong selling however, where do you put your money now with most major currencies reporting virus cases.
• AUD: Moving off the opening lows around the 0.6545 level the Oz made a little bit of headway taking the market through to the 0.6560 area and holding tight to the level before gapping lower for the move into the grey hours and back to the lows before rising in a tight channel through to the 0.6580 level, the run through into NYK saw the market holding above the 0.6570 levels and slowly rising to make the highs just above the 0.6590 area before holding through to the final hour just short of the high, the final hour saw the market dropping quickly lower and finishing the day just below the 0.6570 area on strong volume throughout the day.
• EUR: As Virus cases in Italy explode and the wisdom of the Schengen borders coming under the microscope the Euro benefited for some reason opening on its lows around the 1.0880 area the market moved quickly higher into the Tokyo session to test through to the 1.0910 level before pausing in a long run to the London session, Steady buying through to the 1.0950 area saw the market then pausing for a long run to the NYK session, NYK were steady buyers and pushed through to the London close rising steadily through to just above the 1.1000 level topping around 1.1005 and then dipping back to the 1.0985 area before starting the run for the close threatening the high for a second time.

Yesterday’s Premiership results
NZD Trade Balance (JAN) A 340m | C -533m | P 547m
NZD Trade Balance 12 Mth YTD (JAN) A 3866m | C -3940m | P -4309m
NZD ANZ Activity outlook (FEB) A 12.0 | P 17.2
AUD Private Capital Expenditure A -2.8% | C 0.5% | P -0.4%
USD Durable Goods Orders (JAN P) A -0.2% | C -1.5% | P 2.4%
USD GDP Annualized QoQ (4Q S) A 2.1% | C 2.1% | P 2.1%
USD GDP Price Index (4Q S) A 1.3% | C 1.4% | P 1.4%
USD Continuing Claims (FEB 15) A 1724k | P 1726k
USD Core PCE QoQ (4Q S) A 1.2% | C 1.3% | P 1.3%
USD Durables Ex Transportation (JAN P) A 0.9% | C 0.2% | P -0.1%
USD Initial Jobless Claims (FEB 22) A 219k | C 212k | P 210k | R 211k
USD Personal Consumption (4Q S) A 1.7% | C 1.7% | P 1.8%
USD Pending Home Sales A 6.7% | P 6.8%

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