Collinson FX Market Commentary - Nov 11 - AUD and NZD consolidate

by Collinson FX on 11 Nov 2015 Collinson FX Market Commentary - Nov 11 - Click here to find out how to get Collinson FX's free iPhone app

Nov 11 - Moody's warned the world economy's ability to fight further shocks would be impaired by the extremely loose monetary policy and high debt levels. This is stating the obvious, but is necessary, as Central Banks and Governments do not seem to appreciate the dangerous route they have been travelling down.

Chinese CPI was lower, 1.3% from 1.5%, reflecting the lack of growth pressure in challenging conditions. This did little to inspire markets with equities drifting across Europe and the USA. Currencies were steady, with the EUR falling below 1.0700, while the GBP traded around 1.5100.

Commodity currencies were stable, with the AUD and NZD consolidating above 0.7000 and 0.6500, respectively. Chinese Retail Sales and Industrial Production may impact global markets today but Central Bank commentary and activity remain the major driver.

Collinson FX Market Commentary - Nov 10 - Chinese imports plunge
Nov 10 - The OECD released a down beat economic report overnight. Emerging markets have been hit hard by commodity prices, impacting global trade, leading to less optimistic projections. The U.S. has been sustained by consumer demand and expectations are for growth around 2.5%. The EU is being supported by the ECB Monetary Policy and extended fiscal deficits, which can only be considered emergency measures, does not bode well.

China is expected to grow, but at a declining rate over time, but the Asian slowdown has impacted powerhouses China and Japan. Chinese Trade data confirmed this, with exports falling 6.9%, while imports plunged 18.8%! This did not inspire markets, with global equities plunging sharply. Non-Farm Payrolls beat expectations and this enhanced chances of a Fed interest rate rise, adding to negative sentiment spreading across equity markets.

The EUR traded 1.0750, while the GBP held 1.5100, hit hard by the resurgent Dollar. Commodity currencies consolidated, with the AUD bouncing from 0.7000, while the KIWI fought to hold 0.6500.

Chinese inflation, Retail Sales and Industrial Production will influence markets over the next couple of trading days. All is not well despite the Feds rose coloured glasses.

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