Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 104.629 | EURUSD 1.11852 | AUDUSD 0.62359 | NZDUSD 0.61795 | USDCAD 1.39242 | USDCHF 0.94396 | GBPUSD 1.25656 |

LMAX highs and Lows 06.00 GMT
Highs | Lows
EURUSD 1.12212 | 1.11525
USDJPY 105.988 | 104.513
GBPUSD 1.26014 | 1.,25079
USDCHF 0.94728 | 0.94273
AUDUSD 0.63251 | 0.62615
USDCAD 1.39488 | 1.38676
NZDUSD 0.61571 | 0.61127
EURCHF 1.05938 | 1.05532
EURGBP 0.89271 | 0.88707
EURJPY 118.866 | 116.882

For Today
• GBP: Opening a touch higher the market was unable to challenge the 1.2600 level running into the 1.2590’s from the opening and then a steady drift through to the 1.2570 level for the move into Tokyo, the failure to find a test kit for the virus in the US saw the markets dip and the Cable push through to the 1.2510 area before steadily moving off the lows to run slowly through to the grey hours, pushing the 1.2570 level, while volumes have been reasonably high the market is beginning to look jaded and tired with margins stretched, Downside bids into the 1.2500 level remain with limited stops on a push through the 1.2500 areas possible however, bids likely on a dip to the 1.2450 area and likely to increase into the 1.2400 level and sentimental levels then continue to dominate the downside, topside offers weak through to the 1.2750 level with possible weak stops and the potential for a limited short squeeze through to the 1.2900 area before serious offers really appear.
• JPY: Opening around the 104.80 areas the market struggled through to the Tokyo session making the days lows just above the 104.50 level and quickly pushing above the 105.00 level on the opening, the market held around the 105.00 level deep through the session before rising quickly with a Canadian company claiming a cure for the virus with human tests in weeks, USDJPY tested the 106.00 level before dipping a little for the move into the grey hours, Topside offers through the 106.10 area and then likely stops appearing on any push through the 106.20 area with weak congestion through to the 107.00-50 area where the offers are likely to be a little thicker a test through to the 107.80 level will see stronger offers however, any strong push here could see a squeeze higher. Downside bids light through to the 103.50 areas with weak support through to the 102.80 level and while this would normally see weak stops congestion from that level through to the 102.00 area is likely to be strong with downside interest likely to increase on nervous sellers wary of the BoJ commentaries.
• AUD: Nervous rise but limited moving off the 0.6260 level to test repeatedly to the 0.6320 levels but unable to convincingly push through the level holding for a long period around the level through to the grey hours, Downside bids into the 0.6210 areas with the bids likely to be strong through to the 0.6180 areas and while weak stops may appear could see strong congestive bids through to the 61 cents level and option support into the area, topside offers light through to the 0.6380 area with some congestion likely before the possibility of a quick move through the 64 cents level opening a quick move through to the 65 cents levels.
• EUR: A slow narrow range through the early hours with the market testing lightly through the 1.1200 level before dipping back into the Tokyo session to set the low around the 1.1155 area before starting a slow steady rise through to the 1.1200 level and although a big figure lower reminiscent of yesterdays moves, heading to the grey hours saw the market falling back from the highs around the 1.1220 area to hold the 1.1200 area, Topside offers light through to the 1.1300-20 area with weak stops through the level and the possibility of a quick move through to the 1.1380-1.1400 level with stronger offers in the area, downside bids light through to the 1.1050 area and congestion likely through to the 1.1000 level with option bids likely to be in play and stops on any move through the 1.0980 level opening a deeper move through to the 1.09-1.08 areas.

Overnight News
EUR:
Lagarde: ECB not here to close bond spreads
Lagarde: Currency swings not a policy trigger for ECB
Lagarde: ECB will use all the flexibilities of QE program
ECB adds EUR 120b of net asset purchases through end of 2020
ECB boosts QE, liquidity tools but keeps interest rates on hold
USD:
Pelosi: No vote tonight on virus relief bill
US House speaker Pelosi: White House have neared agreement on Virus legislative package, hopes to make announcement Friday
JPY:
BoJ to hold emergency meeting on stock plunge – Kyodo
Takeuchi: G7 Senior officials had phone conference last night
Takeuchi: See nervous moves in markets
Takeuchi: Will monitor markets closely, act as needed
Takeuchi: Will closely cooperate with G7
Takeuchi: No change in view market showing nervous moves
Takeuchi: No comment on market intervention
BoJ is hesitant to lower short-term rates next week – BBG
BoJ likely to step up Purchases of ETF’s – BBG
BoJ Sees no urgent demand for coordinated rate cuts by major central banks
Asia:
Equity markets turn red again

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
NZD BusinessNZ Manufacturing PMI (FEB) A 53.2 | P 49.6
JPY Tertiary Industry Index MoM (JAN) A 0.8% | C 0.3% | P -0.2%
0700 EUR German CPI YoY (FEB F) C 1.7% | P 1.7%
0700 EUR German CPI EU Harmonized YoY (FEB F) C 1.7% | P 1.7%
1200 MXN Industrial Production NSA YoY (JAN) C -1.5% | P -1.0%
1230 USD Export Price Index YoY (FEB) P 0.5%
1230 USD Import Price Index ex Petroleum MoM (FEB) P 0.2%
1300 CAD Existing Home Sales MoM (FEB) P -2.9%
1400 USD U. of Mich Sentiment (MAR P) C 95 | P 101
1700 USD Baker Hughes US Rig Count (MAR 13) P 793

Harry Hindsight

• GBP: Given the range on the day, a quiet Asian session saw the market tight through to the Tokyo session holding around the 1.2820 level before attempting the 1.2850 level only to fail and slowly drifting through to the grey hours testing back to the 1.2810 level, the move through into the London session saw a steady push through the 1.2800 areas bouncing off the 1.2780 area on the first move and testing back to above the opening levels before again running lower and pushing through to the 1.2750 area before pausing, the move through into the NYK session saw solid USD buying and Cable breaking through the 1.2750 areas and running quickly through to the 1.2650 area with weak stops and breakout seller joining in, again a further pause before breaking lower again and further strong GBP selling sending the market through to the 1.2500 level before bouncing and running steadily back above the 1.2600 level running out of steam before being able to test the 1.2650 level and holding cautiously around the 1.2570 levels through to the close.
• JPY: Opening around the 104.50 level the market struggled to the 104.80 level before moving into the Tokyo session with light selling pushing into the Tokyo fix and a quick dip through to the 103.50 levels before holding around the level with a limited test through to the 103.10 area, comments from Trump who announced the flight to and from Europe suspended helping the USDJPY to run back above the 104.00 level, the run to the London session saw the market back below the 104.00 level and traded tightly around the 103.70 areas through to the opening in NYK, with the opening in NYK a steady few hours of USD buying helping the market to drive higher pushing through the opening highs to test initially the 105.50 area before pushing through once London had left, the market ranged for a period before dipping back to the 104.90 level only to spike to the highs through the 106.00 level before again drifting back to the 105.30 areas and light profit taking into the close to leave the USDJPY below the 105.00 level.
• AUD: A slow drift through the Asian session moving from the opening highs around the 0.6480 area and slowly descending through to the 0.6450 area for the move into the grey hours, after a quiet start for the London session the market again started a quick drift lower with the market steadily moving in a tight channelled move through to the 0.2670 area deep into the NYK session, a minor rally saw short quickly buying to snap the market back through to the 0.6380 areas before again starting a slow slide lower, the move to the Close saw a quick dip to make the lows around the 0.6210 level.
• EUR: Drifting a little in early trading the market held the 1.1250 level through to the Tokyo session before quickly running higher through to the 1.1330 areas before running out of steam and drifting through to the grey hours, to hold just below the 1.1300 areas, poor industrial production numbers weakened the Euro in London dipping slowly through to the 1.1200 level for the move into the NYK session, after a short period the market renewed the move lower with EU officials not so polite about the halt to flights too and from the US and the lack of conversation on the subject however, USD buying started to push through into the session and after a quick dip through to the 1.1150 area the market drifted through to test steadily towards the 1.1050 level before bouncing and pushing back above the 1.1200 level for a run to the close just below that level.

Yesterday’s Premiership results
AUD Consumer Inflation Expectation (MAR) A 4.0% | P 4.0%
GBP RICS House Price Balance (FEB) A 29.0% | C 20.0% | P 18.0%
EUR Eurozone Industrial Production w.d.a. YoY (JAN) A -1.9% | C -3.1% | P -4.1% | R -3.6%
USD Continuing Claims (FEB 29) A 1722k | C 1733k | P 1729k | R 1733k
USD Initial Jobless Claims (MAR 7) A 211k | C 218k | P 216k | R 215k
EUR ECB Deposit Facility Rate (MAR 12) A -0.50% | C -0.50% | P -0.50%
EUR ECB Marginal Lending Facility (MAR 12) A 0.25% | C 0.25% | P 0.25%
EUR ECB Rate Decision (MAR 12) A 0.00% | C 0.00% | P 0.00%

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