FX Market News 17-3

Market Briefs

  • EUR/USD +0.05%, USD/JPY -0.05%, GBP/USD +0.3%, DXY -0.2%
  • DAX -0.05%, CAC +0.4%, Brent +0.2%, Gold +0.2%, Copper +0.2%
  • Dollar poised for weekly losses after Fed disappoints bulls – Rtrs
  • G20 finance heads to repeat FX assurances, no deal yet on rejecting protectionism – Rtrs
  • Oil prices dip as doubts remain over OPEC supply cuts – Rtrs
  • London copper set for biggest weekly gain in five as dollar drops – Rtrs
  • EZ Jan Eurostat Trade NSA -0.6bln vs prev 28.1bln
  • EZ exports rise in Jan, but trade balance in deficit (1st time in 3 years)
  • BoE MPC Forbes: Weak wage growth may reflect temporary Brexit caution – Telegraph
  • An independent Scotland could abandon sterling union – Salmond tells FT – Rtrs

Looking Ahead – Economic Data (GMT)

  • 13:15  Industrial Production (Feb) mkt +0.2% m/m, prev -0.3% m/m
  • 13:15  — Factory Output (Feb) mkt +0.4% m/m, prev +0.2% m/m
  • 13:15  Capacity Utilization (Feb)  mkt 75.5%, prev 75.3%
  • 14:00  U of Michigan Consumer Sentiment Index (prelim Mar) mkt 97.0, prev 95.7
  • 14:00  — Current Conditions Index (prelim Mar) mkt 111.0prev 111.2
  • 14:00  — Expectations Index (prelim Mar) mkt 85.5, prev 85.7
  • 14:00  Leading Economic Indicators Index (Feb) mkt +0.4% m/m, prev +0.6% m/m
  • 14:00  Atlanta Fed Business Inflation Expectations (Mar) prev +2.0% y/y
  • 17:00  Baker-Hughes Rig Count (weekly) prev 617

Looking Ahead – Events, Other Releases (GMT)

  • 15:45  FedTrade 30-year Fannie Mae/Freddie Mac (max $1.15 bn)
  • 17:20  Merkel-Trump joint press conference

Currency Summaries

EUR/USD

  • DXY recovery from post FED 100.16 low peaked 100.39 early London
  • Took EUR/USD off new post FED high 1.0782 to 1.0753
  • Bids related to 1.3bln 1.0750 expiry held, recovers since as DXY retraces
  • Offers a plenty pre 1.0800, but above opens 02 Feb 2017 peak 1.0829
  • Scope to 8 Dec high 1.0875 and 200DMA 1.0895 thereafter

USD/JPY

  • USD/JPY offers around 113.50, kijun supply @113.60
  • Thickening daily cloud weighs on USD/JPY between 113.67-115.13
  • USD/JPY has so far traded a tight 113.24-49 range, market still long
  • Bids still tipped below 113.00, recall 112.91 was the low on Thur
  • Stops are clustered sub 112.90, if triggered it will unmask 112.59 fibo
  • 112.59 – 76.4% retrace of the 111.69 to 115.51 rise

USD/CHF

  • USD/CHF falls to its lowest level since Feb 9 at 0.9945
  • Closing in on 200-DMA key support at 0.9918. MA sppted since Nov
  • EUR/CHF back tracks after corrective rise proved short lived again
  • 1.0742 to 1.0712 in Europe. 1.0684 was hit Thurs after the SNB

GBP/USD

  • GBP/USD met headwind just shy of 1.24 after vaulting 1.2377 (Thurs top/55DMA)
  • Half-yard 1.2400 option expiry for NY cut. 1.2405/10 = Mar 1 high/100DMA
  • GBP continues to benefit from BoE MPC lowering bar to tighter monetary policy
  • EUR/GBP fell nearly half-a-penny from its early Europe intra-day high of 0.8736
  • 0.8736 was notched as continent digested Thursday’s Nowotny comments

USD/CAD

  • USD/CAD met headwind just shy of 1.3350 after rising from 1.3313 (early Ldn low)
  • 1.3351 was Thursday’s high. Canada Jan mfg sales data due 8.30am ET, -0.2% f/c

AUD/USD

  • AUD/USD is consolidating recent gains just shy of 0.77 as weekend approaches
  • 0.7664-0.7695 = Friday range-to-date. 0.7664-0.7697 was Wednesday’s NY range
  • AUD/USD has only posted a weekly close above 0.77 twice since July 2015
  • Both of those weekly closes above 0.77 were in April 2016

NZD/USD

  • NZD/USD has risen from 0.6980 (early Europe low) to 0.7021 (intra-day high)
  • Profit-taking on longs has helped deflate AUD/NZD from 1.10 (Asia high)
  • 1.0956 = intra-day low (plumbed circa 6.15am ET). 1.1020 = 11mth high Thursday

FX OPTIONS

  • Vols crushed across the board since FOMC as ranges hold and risk pared
  • Dutch election results and knock on to French risk premium add weight
  • EUR/USD 1mth lowest in 2 years, likewise AUD, NZD and USDCAD
  • 1mth Cable lowest in a year and 1mth USD/JPY since late 2015
  • Should start to see value bids, but little inspiration to renew longs just yet
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