by Collinson FX
- Etchells Invitation Series - November 12, 2013
Collinson FX market Commentary: November 13, 2013
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Speculation is rife across the US markets fueled by improving economic data and predictions of an easing in QE Infinity. Non-Farm payrolls added more jobs than expected and GDP growth also moved north.
The commencement of tapering may begin by years end but it would be easy for Bernanke to give the hospital pass to Yellen. She is a Dove and is unlikely to move rates up but will face the problem of easing/withdrawal and this will surely test her skills.
The Dollar rose with the speculation of tapering, with the EUR 1.3440 and the GBP 1.5910. US 10 year bonds approached 2.8% as the bond vigilante's do what the Fed fails to. Previous expectations of an end to QE saw rates rise to 3% and this would be the next target. Any break out would be a serious red flag. Commodities currencies seem to be suffering risk worries with the AUD back below 0.9300 and the KIWI 0.8200.
NZ House prices continue to rise, with sales, so an easing in the pressure on the currency would be welcomed by the RBNZ. Look at economic data and speculation of Central Bank activity to drive markets as equities test record highs.
Etchells Invitation Series - November 12, 2013
Collinson FX market Commentary: November 12, 2013
Equity markets hovered around record levels with rising debate over the continued QE Infinity stimulus. The Fed has continued to pump $85 Billion per month into the US economy, which has created the extra-ordinary bubble that will now be tested.
The parameters that were set by Bernanke, including employment and growth, are coming close to being satisfied. Employment remained steady last Friday but Non-Farm Payrolls added over 200,000 jobs, beating expectations. The Holiday season is fast approaching so the appetite of the Consumer will now be under the microscope. It remains hard to see the Fed moving before the new Fed Chairman assumes control in the New Year.
The EUR remains steady, trading 1.3400, with little happening in the single market to drive confidence. Commodities remain bid, as the value of the Dollar dilutes, but remain vulnerable to risk. The AUD traded around 0.9350 and the KIWI 0.8230.
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