by Collinson FX
Not surprisingly, Spain has gone back into recession. Back in Feb 2010 the postponement flag flies over the Race management office in Valencia, Spain - Race 2 America’s Cup 2010
Collinson FX market Commentary: 1 May 2012
Spain confirmed that they were back in recession after the last quarter GDP contracted 0.3%. This was the second consecutive quarter of contraction and confirmed the 'double-dip' recession. This comes after S&P downgraded Spanish sovereign debt and 16 leading Spanish Banks. This will further raise interests rates adding to the pressure austerity is imposing on the economy.
The EUR slipped back to 1.3230 and the GBP 1.6225 as risk appetite edged lower.
In the US the Chicago Fed's Business Activity Indiex fell to 56.2 from 62.2 while Personal Income and Expenditure remained fairly flat. This is the beginning of May which normally heralds a 'sell-off' so markets will look to employment reports in the US to trigger an excuse and break downside technical levels.
Commodities drifted from last weeks highs with the AUD slipping back to 1.0400 with New Home Sales falling 9.4%.
Australia is falling deeper into political crises with the Labor Leader, Gillard, sacking the Speaker of the house and another key caucus supporter testing her knife edge majority in the lead up to the budget. The RBA Interest rate decision is expected to cut interest rates today after concerted political pressure and signs of a slowing economy.
In NZ the KIWI slipped back to 0.8170 in line with international markets. NZ trade data was fairly positive but Building Permits skyrocketed 19.8%.
Collinson FX market Commentary: 30 April 2012
Friday completed a week of rallies with the absence of further bad news from Europe and some strong US corporate earning.
Housing data was mixed but the US learnt the economy was growing at a slower rate than expected.
The US GDP came in at 2.2% down from 3%. The poor economic data failed to spook equities markets which completed a very strong rally at the close.
The EUR reflected the strong appetite for risk rising to 1.3250 and the GBP up to 1.6250.
Commodities also continued recent strength with the AUD hitting 1.0475 and the KIWI 0.8225.
The coming week holds a slew of economic data led by employment data in the US. Chinese PMI and European numbers will also hold interest. The RBA has their rate decision meeting Tuesday with the ECB later in the week.Remember the old adage...'Sell in May...Go away!'
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