Collinson FX Market Commentary - May 30 - Not good global economics

by Collinson FX on 31 May 2015 Collinson FX Market Commentary - May 30 - Not good global Click here to find out how to get CollinsonFX's free iPhone app

May 30 - US GDP number was well below expectations but in line with the reality of global economics. The false narrative of the global economic recovery has been spun from Governments but reality is in the numbers. GDP contracted 0.7% in the US, bursting bubbles of optimism and confirmed by comparative numbers in Europe. Equities slipped, but avoided the usual plunge in May, but may well be challenged this coming month?

The coming week will confirm the Central Banks intentions to flood markets with cash. The RBA and ECB will confirm current loose Monetary Policy supporting record equities. THe EUR jumped to 1.0980, a sad reflection of an undermined USD, rather than any inherent strength. Commodities remain offered and hitting the associated currencies.

The AUD dropped to 0.7640, while the NZD is now below 0.7100, satisfying Central Bank intentions and enhancing trade. This is not good global economic progress!

Collinson FX Market Commentary - May 29 - Greeks dealing from strength

May 29 - Markets were quiet overnight with little in the way of formative economic data. The Greek deal is no closer to a conclusion, apart from the obvious sequence of time, the solution will be a compromise. The Greeks deal from a position of strength, in that they realise the EC cannot allow their withdrawal, but can suffer inaction.

Precedent is what law is made from and the EC are afraid of the example set. If they concede, which they will, other cellar-dweller Med nations will demand the same compromise. The Dollar continues to react to the false narrative of interest rate rises when underlying economic data does not point to economic recovery.

The EUR bounced back to 1.0950, while the GBP flayed around 1.5300, despite a benign GDP number. Commodities tend to confirm the truth, demand is not a fantasy, and the associated currencies reflect just that! The AUD traded around 0.7650, while the KIWI has dipped below 0.7200, confirming the false narrative regarding US interest rate hikes. The economic data will drive market direction to close the week unless Geo-Political events overwhelm.

Collinson FX market Commentary: May 28, 2015 - Confused Greek tragedy
May 28 - European markets rallied, with growing confidence of a deal, in the Greek debt crises. The Greeks announced a deal was 'imminent' although this was refuted by the EC. Confusion reigns supreme, as is the norm, with the Greek tragedy.

Emergency funds are being made available to the Greek Government with compromise likely to avoid a Greek withdrawal from the EC. The Dollar remained firm, with the EUR trading 1.0880, while the GBP slipped to 1.5330, as the Bank of England adopt a Fed type strategy on interest rate decisions.

US markets shared the European confidence and regained some of the losses suffered in equities the previous day. The rhetoric from the Fed has boosted the Dollar and this has been reflected in the commodity currencies.

The NZD traded 0.7215, while the AUD tried to consolidate above 0.7700, boosted by some improving data regarding their Leading Index. Greek negotiations continue to effect European markets, while Geo-Political issues remain a threat, although economic data will drive daily market moves.

Collinson FX market Commentary: May 27, 2015 -
May 27 - Equity markets crashed, in the USA, when they opened after the long Memorial Day weekend. Yellen assured markets that interest rates would rise this year if global economic conditions warranted it.

Economic conditions have been, at best, mixed. Equities thrive on the mega-liquidity global Central Banks have been more than happy to flush markets with and any threat to the cash disrupts the record breaking equity markets. US House Prices continued to rise, but at a moderate pace, while durable goods contracted.

The bullish sentiment from the Fed boosted the Dollar, with the EURO falling to 1.0870, while the GBP dropped to 1.5380. Commodity currencies were equally impacted, with the AUD now testing 0.7700, while the KIWI finally broke below 0.7300 and trades in the low 0.72's.

The Fed continues to drive currency movement but the bullish language will be contradicted as the implications of interest rate rises become clear!

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