Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 119.494 | EURUSD 1.09702 | EURJPY 131.086 | AUDUSD 0.78443 | NZDUSD 0.76212 | USDCAD 1.25195 | EURCHF 1.0528 | USDCHF 0.95979 | GBPUSD 1.48804 | EURGBP 0.73722 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               119.57 | 118.85

EUR/USD             1.0994 | 1.0958

EUR/JPY               131.10 | 130.505

AUD/USD            0.7851 | 0.7800

NZD/USD             0.7611 | 0.7571

USD/CAD             1.2529 | 1.2473

EUR/CHF              1.0544 | 1.05215

USD/CHF             0.9607 | 0.9586

GBP/USD             1.4897 | 1.4873

EUR/GBP             0.7381 | 0.7366
For today

• EUR: The market moved lower slightly from the opening easing back to the 1.0960 levels and then Tokyo buyers moved into the market and the Euro reached the 1.0980 level and ranged for several hours in the area, the 1.1000 was attractive and the market eventually pushed for the level pushing through the 1.0990 levels however, offers appeared and the market continues to move close to the level, topside offers from the current levels and likely to go through to the 1.1020 areas before any weak stops appear, even through the levels we have seen the market test as high as the 1.1050 level however, they have been spikes and the market closed down quickly on the moves so probably a struggle however, through there will open up a test of the 1.1100 levels and that is likely to be weakly protected and the 1.1200 level is likely to be a little tougher. Little data to help any movement though and it will rely on whispers and comments. Downside has bids into the 1.0920-1.0890 levels before opening up for a test lower and into the 1.0820’s.
• GBP: Cable quietly ranged through the session moving from the opening 1.4880 levels and then traded around the level all through the session pushing towards the 1.4900 and unable to get through and testing only lightly through the opening levels. Topside offers into the 1.4900 level are likely to be light however; unlike the Euro the UK has retail sales to hit later today and that maybe a game changer for the Cable and GBP in general with a decent number. Through the level light stops will likely appear and a push to the 1.4950 will hold very little through there the market will likely take the edge off the rally and the run to 1.5000 will be stronger in offers. Downside bids into the 1.4820-1.4800 levels and a break here on bad numbers will likely see the 1.4750 levels protecting the downside and then likely bids from then on.
• JPY: USDJPY opened around the 119.50 and traded a touch higher before the sellers in Tokyo appeared in the market and sellers mostly from the retail sector took the market lower and into the 119.30’s, news that Saudi Arabia has been conducting military operations in the Yemen put a squeeze on the crude and the movement higher was enough to put the USDJPY lower and USD’s in general. As the market moved to the grey hours  pushing through the 119.00 level and triggering some light stops through 119.20 and into the 118.90 areas where the market holds for the moment, downside bids continue into the 118.50 levels, yield plays are likely to continue and moves lower are likely to appear towards the 118.20 areas and possibly stronger. Initial claims may play a part however; they have been mostly in line with consensus over the past few months but could provide interest. Topside offers into the 119.40 areas are likely to be weak and a move through opens up further tests to the 120.00 levels.
• AUD: The Oz having opened around the 0.7850 was in decline from the start moving into the Tokyo session already testing through 0.7830 as the news in the Middle East ran through the markets and the crude price increased, there was a brief reprise in the market however, AUDJPY buying was unable to support the market and the market had to test the 78 cent level before starting a weak recovery to the 0.7820 levels into the grey hours. Topside offers are likely to be thin on the ground until the market starts to move towards the 79 cent level were the offers are likely to be concentrated however, this is more dependent on the Crude prices than anything else because while the cost of raw materials has declined the benefit of cheaper oil has balanced that partially and to lose that could be very limiting. Downside bids into the 78 cent will give way to likely stops through the 0.7780’s and into the 0.7750 areas, weak bids are likely to appear however, they are likely to be just that until on the 76 cent handle were there are better bids and in depth.

Overnight News

OIL:

Oil in Biggest 5-Day Gain since 2011 on Yemen; Asia Stocks Slide

SAR:

Saudi Arabia, Gulf Allies Bomb Houthi Targets in Yemen

JPY:

Japanese Bought Net 765.5 Billion Yen Overseas Debt Last Week

Japan Needs Growth-Focused Spending Plan: Abe Adviser: Reuters

Aso: Japan Should Carefully Mull Tax on Cos’ Retained Earnings

CNY:

China May Ease Restrictions on QFII, RQFII Investments: Reuters

China Official Says No Answer on QFII Reform Question

PBOC Says China to Keep Prudent Monetary Policy

PBOC Official Says Targeted Measures Effective: Bus. News

China May Allow Foreign Capital in Power Business: China Daily

CHF:

SNB Spent 26 Billion Francs on 2014 Interventions, Report Shows

IDR/JPY:

Widodo Asks Toyota to Set Indonesia as Export Base: Kompas

NZD:

Fonterra to Increase Offer Volumes at Dairy Auctions

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

07:00     EUR        German GfK Consumer Sentiment Apr C 9.8 | P 9.7

09:00     EUR        Eurozone M3 Y/Y Feb C 4.30% | P 4.10%

09:30     GBP       Retail Sales M/M Feb C 0.40% | P -0.30%

11:00     GBP       CBI Reported Sales Mar C 20 | P 1

12:30    USD       Initial Jobless Claims (MAR 21) C 295K | P 291K

Harry Hindsight              

• EUR: With Greece becoming ever more uncomfortable with the constraints laid out for the government the negotiation process the risks for Europe are likely to increase although we are told this is covered, that in mind the Euro opened around the 1.0920 area and first tested the downside to just above the 1.0900 levels into the Tokyo session however, Tokyo were quick buyers and the market moved away and then steadily pushed through the opening levels and towards the 1.0940 level in light trading. The move into the grey hours again saw the market test lower however, this time it was unable to test below the 1.0910 levels and that was the last test of the downside. Early London bought strongly in front of the IFO release and the market pushed through to light offers in the 1.0950-60 areas and traded around the level for awhile before further buying pushed through the level and triggered weak stops through the 1.0970 levels. The move into NYK saw the buying continue especially with the release of a poor durable goods number and the market pushed through the 1.1000 level touching through 1.1010 on two occasions before the selling really kicked in and the market dropped steadily back taking out the weak longs through the 1.0970 level before settling into a range play around the level to the close.
• GBP: Cable pretty much followed the route of the Euro with no data of note the market had little independent movement and lost ground against the Euro along the way, moving from the 1.4830 area low into the Tokyo opening the market moved higher and pushed steadily to the 1.4870 levels before finding light offering holding the topside, the move into the grey hours saw the same pattern as the Euro with the market initially easing back to the 1.4850 levels before early London started a quick round of buying and pushing it to the 1.4890’s, the cross moved up 20 pips during the period. The move into NYK saw Cable move market peak as Durable goods was released and the market touched through the 1.4950 level before steadily spending the evening dipping back through 1.4900 as the pressure diminished. There was a little choppy action through into the London close and the market tested down to the 1.4860 levels before holding the 1.4880 levels into the close.
• JPY: USDJPY eased back over the day however, the market was limited range wise as topside offers were only tested in early trading pushing to the 119.80 levels before the market limped to the 119.60 level and held into the grey hours. A weak attempt higher before the market drifted into the London session and a drift into the 119.50 area, as with the other majors the market dipped into the release of the Durable goods numbers and traded through the 119.30 level but nothing more with buyers quickly appearing to take the market back to the 119.60 levels and then ranging around the 119.50 level into the close.
• AUD: As with USDJPY the market for the Oz was subdued for the most part moving from the 0.7880 levels and testing only to the 0.7890 level into the Tokyo session before relinquishing the gains and drifting to the grey hours and down towards the 0.7850’s, the market moved back to the 0.7870 levels and although the market spiked on the release of the durable goods and touched through the 79 cent level however, it was a half-hearted attempt and the market moved down and through the 0.7870 levels triggering weak stops and a tumble to the 0.7850 levels and then a slow limp to the close with the market trading around the 0.7840 levels, so again not exactly a USD bear day.

Yesterday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

NZD       Trade Balance (NZD) Feb A 50M | C 355M | P 56M | R 33M

JPY         Corporate Service Price Y/Y Feb A 3.30% | C 3.30% | P 3.40% | R 3.50%

CHF        UBS Consumption Indicator Feb A 1.19 | P 1.24

EUR        German IFO – Business Climate Mar A 107.9 | C 107.3 | P 106.8

EUR        German IFO – Current Assessment Mar A 112 | C 112 | P 111.3

EUR        German IFO – Expectations Mar A 103.9 | C 103 | P 102.5

GBP       BBA Mortgage Approvals Feb A 37.3K | C 36.9K | P 36.4K | R 36.5K

USD       Durable Goods Orders Feb A -1.40% | C 0.60% | P 2.80% | R 2.00%

USD       Durables Ex Transportation Feb A -0.40% | C 0.50% | P 0.30% | R -0.70%

USD       Crude Oil Inventories A 8.2M | C 5.0M | P 9.6M

Good Luck,

Andy

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