Collinson FX Market Commentary - Sept 16 - US shrinks while NZ grows

by Collinson FX on 16 Sep 2016 Collinson FX Market Commentary - Sept 16 - US shrinks while NZ grows

Sept 16 - There has been an avalanche of economic data releases, globally, overnight. The US saw a further contraction in the all important Retail Sales, with the consumer being the major driver of the economy, this does not bode well for any rate rises from the Fed. To further accentuate this, Industrial Production also contracted, adding to the negative discord.

This sparked a further rally in equities and slide in the Dollar. The EUR moved to 1.1250, while the GBP stuttered, as the Bank of England left rates unchanged with a softening bias. The AUD pushed back above 0.7500, boosted by further improvement in local employment data, while inflation data confirmed growth.

The NZD also rallied back to 0.7300, boosted by the reserve and better than expected GDP growth, while Manufacturing PMI was steady. Data just confirms speculation on Central Bank moves and markets will focus on the Fed and Bank of Japan announcements next week!

Collinson FX Market Commentary - Sept 15 - Swallowing Euro inaction

Sept 15 - The markets continued to digest the inaction of the ECB and the impact this may have on the Fed's rate decisions. ECB President Draghi, left rates unchanged and resisted any extension of QE. The talk of an imminent rate rise, last week, caused a big slump in equities.

The Fed is not likely to do anything until after the November Presidential elections and benign economic conditions will confirm this course of action. The Dollar drifted lower, with the EUR pushing back to 1.1250, while the GBP traded 1.3230.

Australian Consumer Confidence pushed north with the AUD, which moved up to 0.7460, while the NZD rebounded to 0.7270. NZ Current Account deficit was in line with expectations (2.9%/GDP) and House Sales fell 3,1%. All eyes are on economic data releases and the impact this will have on Central Bank speculation.

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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