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Andy Harrison

Good morning,

LMAX Highs and Lows 0600 GMT

For Today

• GBP: A little weaker from the opening to test through to the 1.2320 area before recovering in an illiquid start, Tokyo came in and the Cable slow pushed through to the highs around the1.2355 area however, initial chatter on the subject of Oil looking optimistic the USD started a slow push higher and the Cable dipped through to the 1.2320 level again this time ranging around the level and going deeper from that level the close the market moved to London eventually testing the 1.2310 level. Topside congestion through to the 1.2350 area and likely to increase on any move to test the 1.2400; level with weak stops doing very little on a move through to the 1.2450 level and increasing offers likely to 1.2500. Downside bids light through each sentimental level with the 1.2000 likely to be the strongest level if that is possible and the downside then o0pening through to the 1.1650 and possible stronger bids appearing.
• JPY: Dipping in early trading from the opening 108.90 area the market tested through to the 108.50 level before USD buying started to push through again and the USDJPY saw the highs on a move through to the grey hour testing the 108.95 areas, Downside bids light through to the 107.50 level with bids likely to increase through to the 107.00 level with strong stops on any dip through the 106.80 level otherwise the market is lightly populated between the 108-109 levels, Topside offers light through to the 109.50-70 level with possibility of weak stops on a break through with increasing offers into the 110.00-20 level and stops again reappearing for any move above there with congestion then appearing in depth to slow any move.

• AUD: Early Tokyo saw the highs however, with comments from S&P saw the market quickly move off the 0.6180 high to test through to the 0.6125 area and the lows, the market struggled for several hours testing to the 0.6150 area but returning to the lows before slowing its range through to the grey hour, Stronger offers on a test through the 62 cents level with weak stops on a break of the 0.6225-30 level and opening the market to a weaker sentimental 63 cents level with similar levels of resistance onwards. Downside bids light through to the 0.5900 level and limited support before opening for a further test of the downside and the stronger 58 cents level.
• EUR: quiet opening with a weak p0ush abo0ve the 1.0900 level before dropping off for the move into the Tokyo session and then drifting after the test through the 1.0870 level to eventually touch the 1.08860 with a small push back on the move into the grey hour, Downside bids light through to the 1.0800 area where the possibility of strong congestion however, a push through again exposes the lows to further tests especially if the situation with the virus continues to worsen. Topside offers through into the 1.1000 level are likely to be limited but increasing through the sentimental level and into the 1.1080-1.1100 level with weak stops likely on a push through the 1.1120.

Overnight News

JPY:
Japan life insurers dump record amount of foreign bonds in March – BBG
NZD:
NZ Business confidence slumps to record low, preliminary data – BBG
Hawkesby: RBNZ very open to changing size of QE program
Hawkesby: RBNZ didn’t know exact size of 4Q Government bond issuance
Hawkesby: There’s a limit to how much of bond market RBNZ can buy
Hawkesby: Considering other assets for QE, linkers on the list
Hawkesby: Buying LOFA should help corporate bond market
Hawkesby: Urges banks to step up in corporate bond market
AUD:
Australia’s credit rating outlook cut to negative by S&P – BBG
S&P: Australia Government debt burden to weaken materially – BBG
S&P: Substantial deterioration of Australia fiscal headroom – BBG
S&P: Covid-19 dealt Australia a severe economic, fiscal shock
S&P: Large Australia budget deficits likely temporary – BBG
S&P: Australia Government deficit to average 7.5% of GDP 2020-2021 – BBG
S&P: Australia annual growth to fall 1.3% in fiscal 2020 – BBG
Is RBA worried about the steepening yield curve – AFR
Australia banks, insurers should consider dividend cuts – APRA
APRA: also calling for executive cash bonuses to be limited
APRA: recommending banks, insurers consider dividend cuts.
USD:
Trump says USD is strong; People are investing in USD – BBG
OIL:
Crude Dives 9% on worries an output cut won’t be big enough – BBG
Letter from Iran Oil Minister to OPEC is not too encouraging – RTRs
Iran Oil Minister says Iran does not agree with holding any OPEC+ Meeting without having a clear and consensual outcome to oil market – RTRs
Iran Oil Min, Absence of any clear outcome to oil market is a failure message even before OPEC+ meeting starts which may aggravate current low oil prices further letter to OPEC
Iran Oil Min volume of oil production cut and duration, output cuts by US and Canada, Baseline level and distribution of cuts should be addressed before OPEC+ meeting letter to OPEC

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised – R | All timings GMT/UTC
JPY Machine Orders YoY (FEB) A -2.4% | C -3.0% | P -0.3%
JPY Trade Balance BOP Basis (FEB) A 1366.6b | C 2021.5b | P 1626.8b | R -985.1b
AUD Home Loans Value MoM (FEB) A -1.7% | C 2.0% | P 4.6%
AUD Investor Loan Value MoM (FEB) A -1.9% | C 2.5% | P 3.6%
JPY Bankruptcies YoY (MAR) A 11.79% | P 10.71%
0500 JPY Eco Watchers Survey Current (MAR) A | C 22.0 | P 27.4
0500 JPY Eco Watchers Survey Outlook SA (MAR) A | C 19 | P 24.6
0545 CHF Unemployment Rate (MAR) A | C 2.6% | P 2.5%
0545 CHF Unemployment Rate s.a. (MAR) A | C 2.6% | P 2.3%
1100 MXN Industrial Production NSA YoY (FEB) A | P -1.6%
1100 USD MBA Mortgage Applications (APR 3) A | P 15.3%
1215 CAD Housing Starts (MAR) A | C 170.0k | P 210.1k
1230 CAD Building Permits MoM (FEB) A | C -3.5% | P 4.0%
1430 USD DOE US Crude Oil Inventories (APR 3) A | P 13833k
1800 USD FOMC Meeting Minutes (MAR 15)
2301 GBP RICS House Price Balance (MAR) A | C 10.0% | P 29.0%

Harry Hindsight

• GBP: News that Boris Johnson was placed in intensive care caused a sell off at the end of the previous session that triggered further selling after a quiet opening around the 1.2235 with Tokyo instantly opening to push the market through to the 1.2145 area before bouncing and recovering steadily through the early part of Tokyo to push the 1.2250 level, a pause through mid-session before rising through the level to test the 1.2275 areas for the move through to the grey hour, Early London continued through buying and the 1.2300 level was quickly surpassed on a move towards the 1.2350 level before slipping slowly through to the 1.2300 level for the move into the NYK session, NYK opening saw the cable rising again and this time pushing through to the 1.2380 levels before slipping slowly back to the 1.2300 again and then holding around the 1.2335 area ranging through
• JPY: Opening around the 109.20 level the market pushed through into the Tokyo session making the high of the day pushing lightly above the 109.25 level before starting a steady move lower with the initial run through to the 109.00 level and the after a short pause running again to the 108.70 level to find a base for the run to the grey hour and the London session after a brief dip below the level, London were slow buyers through to the NYK session with the USDJPY at least pushing through to the 109.10 level in quiet trading before slowly ranging lower for the move to the close back towards its lows.
• AUD: Opening quietly the Oz moved through into the Tokyo session before popping from the low of the day 0.6075 to test just above the 6120 level and ranging around that level through to late in the session and the RBA announcement of no change and a quick run to the 0.6150 level, once London moved in the market again rallied through to the 0.6190 areas and then struggled for several hours through to the NYK session with limited buying helping the Oz break the 62 cent level by a small distance testing towards the 0.6210 level a couple of times before dropping back to the 0.6170 are and slowly finishing the day just off that level in quiet trading.
• EUR: Slipping a little into the Tokyo session the market tested just below the 1.0785 area and slowly rising through to the 1.0810 areas in a steady rise and then pushing a little quicker as the market moved into the grey hour with early Europeans pushing slowly and London opening doing the rest with a push through to the 1.0860 level and a slow range through early morning in London unable initially to push beyond the 1.0880 level and struggled until NYK entered and running quickly through to push through the 109.00 level testing lightly to the 1.0925 level for the high of the day before dipping quickly back on the failure to the 1.0880 area, a long drawn out run to the 1.0900 area to the close.

Yesterday’s Premiership Results
NZD NZIER Business Opinion Survey A -70 | P -21
AUD AiG Performance of Service Index (Mar) A 38.7 | P 47.0
JPY Labour Cash Earnings YoY (FEB) A 1.0% | C 0.2% | P 1.5%
JPY Overall Household Spending YoY (FEB) A -0.3% | -3.3% | P -3.9%
JPY Real Cash Earnings YoY (FEB) A 0.5% | C -0.7% | P 0.7%
AUD Trade Balance A 4361m | C 3750m | P 5210m
AUD RBA Cash Rate Target (APR 7) A 0.25% | C 0.25% | P 0.25%
JPY Coincident Index (FEB P) A 0.6% | P 0.8%
JPY Leading Index CI (FEB P) A 92.1 | C 92.0 | P 90.5
EUR German Industrial Production n.s.a. & w.d.a. YoY (FEB) A -1.2% | C -3.0% | P -1.3%
GBP Unit Labour Costs YoY (4Q) A 2.4% | P 3.6% | R 3.2%
MXN CPI YoY (MAR) A 3.25% | C 3.37% | P 3.7%
USD Consumer Credit (FEB) A 22.331b | C 14.0b | P 12.021b

Best Regards
Andy

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