Collinson FX Market Commentary - July 6 - Canary in mine shaft again?

by Collinson FX on 6 Jul 2016 Collinson FX Market Commentary - July 6 - Canary in mine shaft again?

July 6 - Bond yields are nestling on record lows, which is a canary in the mine shaft, raising levels of concerns in equities. Share markets gave up ground, while uncertainty drove the Dollar and Yen higher, with macroeconomics taking centre stage.

The JPY traded 101.75, while the EUR slipped to 1.1070, with the GBP headlining with 30 year lows. The GBP is now testing 1.3000, so investors taking a punt on a recovery post-Brexit, hold on! Commodity currencies suffered the resurgent Dollar, with the RBA declining any actions, resulting in a steady currency until the declining reserve hit.

The AUD traded strongly in local trade, despite the political flux, holding 0.7500. The flight to safety of the Dollar impacted in overnight trade pushing the AUD back below 0.7450, while the KIWI slipped back to 0.7130. Global conditions remain weak and the Avalanche of data this week will confirm the state of play.

Collinson FX Market Commentary - July 5 - Elections but no Decisions
July 5 - The July 4th long weekend in the USA has ensured a very quiet start to the week despite the political situations evolving around the world. Upheaval, turmoil and uncertainty are becoming the new norm. Nigel Farage, UKip leader and major Brexit advocate, has now resigned....'mission accomplished'!

The battle continues for the leadership of the ruling Tory party, while Labours Corbyn clings bitterly to the leadership despite the parliamentary party rejection!

In Australia, limbo prevails, while the scrutineers take a well earned break?! A dozen decisive seats remain uncounted ensuring no result but the election counting was halted for two days. It will resume today but a result may take a few days. Furious negotiations will commence, as a hung parliament is in the wind, providing further uncertainty.

Australian equity markets were steady, despite threats from ratings agencies regarding the looming deficit/debt challenges, while the AUD rallied towards 0.7530. The KIWI complimented this move, testing 0.7200 on the upside, a product of a settling reserve. The GBP looked to regain 1.3300, while the EUR traded 1.1150, as markets stabilized, adjusting to the new norm!

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