by Collinson FX
Image of the day Oracle Team USA sailing the AC72 - USA-17 on Day 2, September 17, 2012 AC72
Collinson FX market Commentary: September 18 2012
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The fallout from QE3 remains with the equity markets showing risk appetite.
The positive news from the equity markets are not reflected in our quantum which we call reality. The deficits remain crippling and debt levels have reached tipping point, so why have the markets decided to invest in equities. Bernanke has decided that corrupted Keynesian economics will keep his job as he pins his hopes on the biggest spending President of all time!
The world needs a quantum shift and address the welfare/beneficiary system robbing productive society to support largesse.
The EUR moved to 1.3100 after all the Central Bank corruption of the Dollar and the GBP moved to 1.6250. Commodities have found support with the reserve currency demise although the AUD struggles at 1.0465.
Questions must be asked as to the relative weakness despite the concerted effort to undermine the reserve currency.
The KIWI trades 0.8250 and shows some support though fundamentals point to a terrible readjustment.
Re-election of the Obama democratic regime could spell the end of western capitalism and with it the hopes of future generations!
Collinson FX market Commentary: September 17 2012
Equities continued to rally on the back of Bernanke's nuclear option. The release of the new QE3 allowing the Fed to buy $40 Billion/month for eternity has sent equity markets into a buying frenzy crashing through technical tops.
The overhwelming response is natural considering the promise of an endless supply of cheap money. The rally continued with some positive data assisting markets. University of Michigan Consumer Sentiment rose as did Retail Sales endorcing the rise in risk sentiment. Egan-Jones downgraded the US from AA to AA- but this failed to raise any fears. Manufacturing and Industrial Production in the US both slipped confirming the state of the US economy and exemplifying the reason for central bank interference.
The USD has been understandably trashed as the Fed washes away the value of the once mighty Dollar. The EUR rallied to 1.3115 and the GBP 1.6215. Rumours abound that a pending EU$300 Billion bailout of Spain is being considered by the Troika. The EC,ECB and the IMF would not discourage the bailout considering the contingency mechanisms they now have in place.
Commodities rallied as the USD faultered boosting the AUD to 1.0540 and the NZD to 0.8275. This week will closely monitor activity in the Eurozone with US economic data featuring Housing and Manufacturing.
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