Collinson FX Market Commentary - Sept 14 - Opportunity for new theory
by Collinson FX on 14 Sep 2016
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Collinson FX Market Commentary - Sept 14 - Opportunity for new theory
Sept 14 - Equities retraced again, overnight, on the back of ECB inaction. ECB President, Draghi, refused the temptation of further QE. Perhaps the Economic theories surrounding monetary expansionism is starting to dawn on the intellectuals? The recession was countered by monetary augmentation without the fiscal solution. Western economies have refused to balance the books, with huge deficits adding to massive debt.
The debt levels preclude any action from Central Banks, as a rise interest rates would see debt servicing become an issue, default not improbable. US Equities crashed again as markets realise the economic quagmire we are in. The Dollar was the inevitable beneficiary, with the EURO falling to 1.1200, while the GBP drifted to 1.3200!. Oil jumped back to $47/barrel, but the spike was not a boost for commodities in general, more a reaction to supply issues.
The NZD fell more than a big figure, back to 0.7230, while the AUD languished at 0.7450. Economic fundamentals are obviously weak, precluding any return to normal monetary policy, allowing the academics to invent new economic theory?!
Collinson FX Market Commentary - Sept 13 - Reversal triggers rise
Sept13 - The Dow recovered some of the big losses experienced last Friday. Fed Governor, Lael Brainard, contradicted the statement by the President of the Boston Fed last Friday that caused the big slump last Friday.
Last week the threat of an interest rate rise was enough to trigger a big sell-off on Wall St. Some of those losses were regained with the statement, 'it would be wise to keep monetary policy loose', deflating Dollar pressure. The EUR traded 1.1250, while the GBP pushed up to 1.3340, resuming recent trends.
The AUD moved back to 0.7550, while the NZD rebounded off 0.7300, strongly. A quiet start to the week should be enlivened by some inflation and employment data release from Europe and further Central Bank speculation.
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