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Andy Harrison

Good Morning,

For Today

• GBP: A quiet move through into the Tokyo session before lifting off the base 1.3680 area for a push through the 1.3700 not looking back to the early opening lows around the 1.3675 area, the move through to the grey hours saw the market pushing slowly through the 1.3710 area, Topside offers into the 1.3750 area with weak stops likely through the level and then increasing into the 1.3800 area and congestion then continuing through to the 1.3840 area where an old trendline awaits and into a stronger 1.3850 area. Downside bids light through the 1.3700 level with limited stops through the level and stronger bids starting to build around the 1.3650-00 level on a move down, weak stops through the 1.3600 level likely to trigger some selling however, 1 .3550 is likely to be a stronger level.
• JPY: Opening unchanged and drifting through into the Tokyo session before some stronger buying moved through to the 103.90 area before quickly dipping through the 103.80 areas on a test late in the session through to the grey hours holding around the 103.70 area. Light offers through the 104.00 area and increasing a little through to the 104.20 area, weak stops on the move level and light congestion running through to the 104.50 area and increasing offers then through to the 104.80-105.00 level and stronger offers. Downside bids through to the 103.00 area, a push through the level will likely see bids continuing until a break of the 102.80 area and then a similar pattern through on the 102 handle with 102.50 then providing support.
• AUD: Light USD selling helped the AUD higher pushing quietly off the early lows testing the 0.7705 area and a slow rise through into the Tokyo session testing into the high 0.7720’s on the initial rise and after a little dip into the opening 0.7710 area pushed steadily off the area and a continual test to the low 0.7740’s into the grey hours, light bids through the 0.7700 area with weak stops light through the 0.7680 area before running into the weak bids into the 0.7650 level then steady bids through to the stronger 76 cents level. Topside offers through the 0.7750 area and stronger offers then starting through the 0.7780-0.8020 level before weak stops and stronger offers again appearing this time through the 0.8040-60 level.
• EUR: Limited range after an unchanged opening and the market tested lightly to the 1.2165 area before moving into the Tokyo session testing lightly towards the 1.2175 area, fix selling saw the Euro dipping through to the 1.2160 level before USD selling moved in and a steady rally through to the 1.2180 for the move into the grey hours, Downside bids into the 1.2050 area with increasing bids into the 1.2000 level with weak stops on any move through into the 1.1980 level with break out stops a possibility, Topside offers through the 1.2100 level light with the topside likely to remain weak through to the 1.2180 area before some stiffness appears through to the 1.2200 level with very little in stops until 1.2220 level and weak stops easily absorbed in stronger resistance.

Overnight News
KRW/USD:
Samsung eyes investing up to $17b in new US chip plant – NS6
EUR:
As virus variants keep spreading, EU governments consider stringent new travel bans – DJ
Europe’s bond traders fear ECB muzzling its most powerful tool – BBG
GBP/SEK/EUR:
AstraZeneca’s Covid-19 vaccine shortfall threatens EU plans to boost inoculations – DJ
NZD:
NZ health authorities working on the assumption new community case is a more transmissible variant – RNZ
USD:
Musk targets telecom for next disruption with starlink internet – BBG
Rates traders are counting on Powell to quell talk of 2021 taper – BBG
Sanders says democrats will use reconciliation as soon as we possibly can to pass Covid-19 package – CNN
GBP:
UK extends councils lockdown powers until July 17 – TEL
CNY:
China’s offshore purgatory snares more Australian coal cargoes – BBG
AUD:
RBA Has many more bullets to fire – AFR
Morrison consults Rudd, Howard over China – AFR
PM begins to lower vaccine expectations – AFR
HKD:
First Hong Kong Lockdown, Chinese City closed off – BBG
USD/CNY:
US-China relations, Washington urges Beijing to stop Pressuring Taiwan after reports of airspace incursion – SMP
MXN:
Mexico’s President says he’s infected with Covid-19 – BBG

Today’s Data

0845 EUR ECB Lagarde Speaks
0900 EUR German Business Expectations (JAN) A | C 93.2 | P 92.8
0900 EUR German Current Assessment (JAN) A | C 90.6 | P 91.3
0900 EUR German ifo Business Climate Index (JAN) A | C 91.8 | P 92.1
1615 EUR ECB Lagarde Speaks
2350 JPY Monetary Policy Meeting Minutes

Harry Hindsight

• GBP: Early highs into the Tokyo session pushing to the 1.3735 area before slowly drifting through to range in the 1.3710-20 areas until just before the grey hours when it started drifting again pushing steadily through to the London opening testing the 1.3660 area, London buying reversed much of the loss in a single ticket type move before again testing through into the 1.3660 area, the move through to the NYK session saw a slow range recovering through to mid-1.3675 area and early NYK quickly selling through the opening and testing to the 1.3640’s area for the lows before starting a recovery through to the 1.3680 area for a quiet range to the close.
• JPY: Opening quietly and trading through into the Tokyo session before slowly pushing through the 103.60 area only to dip back to the 103.50 level opening area, midsession saw a steady push through to the 103.70 level and the move through the grey hours saw a limited dip before setting the market up for the drive through to the highs in London and testing the 10390 area before drifting and holding the 103.80 area for the close.
• AUD: Quiet pre-Tokyo saw the market ranging around the 0.7765 area through into Tokyo and a steady slow drift through to the grey hours, in a fairly quiet session testing the 0.7740. grey hours saw a quick 10 pip dip and the move through into the London session saw the drift continuing and a mild rally through to the 0.7740 area however, that was it and was quickly back into its former drifting this time through to the 0.7700 area before finding sufficient bids to hold the market in place to the close.
• EUR: Overall a rangy day holding around the 1.2170 level through out the session, rising in early trading testing towards the 1.2180 area before dipping to the 1.2160 level and that defined Asia with the Euro moving back to the median, grey hours selling saw the low of the day on the move into the London session, London bought on the opening to quickly run to the 1.2190 area and rallying through the balance of the day in an ever decreasing range to the close never really challenging the topside and unable to test through the 1.2150 area to finish around the 1.2170 level.

Premiership Results
NZD Business NZ PMI (DEC) A 48.7 | P 55.3
NZD CPI YoY (Q4) A 1.4% | C 1.0% | P 1.4%
NZD CPI QoQ (Q4) A 0.5% | C 0.1% | P 0.7%
JPY National Core CPI YoY (DEC) A -1.0% | C -1.1% | P -0.9%
AUD Retail Sales MoM A -4.2% | P 7.1%
JPY Services PMI (JAN) A 45.7 | P 47.7 | R 47.2
GBP Core Retail Sales YoY (DEC) A 6.4% | C 7.0% | P 5.6% | R 5.3%
GBP Core Retail Sales MoM (DEC) A 0.4% | C 0.8% | P -2.6% | R -3.0%
GBP Retail Sales YoY (DEC) A 2.9% | C 4.0% | P 2.4% | R 2.1%
GBP Retail Sales MoM (DEC) A 0.3% | C 1.2% | P -3.8% | R -4.1%
EUR German Manufacturing PMI (JAN) A 57.0 | C 57.5 | P 58.3
EUR German Services PMI (JAN) A 46.8 | C 45.3 | P 47
EUR Manufacturing PMI (JAN) A 54.7 | C 54.5 | P 55.2
EUR Markit Composite PMI (JAN) A 47.5 | C 47.6 | P 49.1
EUR Services PMI (JAN) A 45.0 | C 44.5 | P 46.4
GBP Composite PMI (JAN) A 40.6 | C 50.7 | P 50.4
GBP Manufacturing PMI (JAN) A 52.9 | C 57.3 | P 57.3
GBP Services PMI (JAN) A 38.8 | C 49.9 | P 49.9
CAD Core Retail Sales MoM (NOV) A 2.1% | C 0.3% | P 1.0%
CAD Retail Sales MoM (NOV) A 1.3% | C 0.1% | P 0.4%
USD Manufacturing PMI (JAN) A 59.1 | C 56.5 | P 57.1
USD Markit Composite PMI (JAN) A 58.0 | P 55.3
USD Services PMI (JAN) A 57.5 | C 53.6 | P 54.8
USD Existing Home Sales MoM (DEC) A 0.7% | C -2.0% | P -2.5% | R -2.2%
USD Existing Home Sales (DEC) A 6.76m | C 6.55m | P 6.69m | R 6.71m
USD Crude Oil Inventories A 4.351m | C -1.167m | P -3.247m
USD US Baker Hughes Total Rig Count A 378 | P 360 | R 373

Best Regards
Andy

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