Collinson FX Market Commentary - Apr 22 - Trump's action sparks rally

by Collinson FX on 24 Apr 2017 Collinson FX Market Commentary - Apr 22 - Trump's action sparks rally

Markets rallied to close the week with Trump signing executive orders for tax reform and financial deregulation. Tax reform is likely to come next week and financial deregulation is likely to come in the form of repeal of the Dodd/Frank legislation.

This will release markets and fuel the rally. France hold the first round of the Presidential elections this weekend with the possibilities ensuring nervous markets. Polls point to the centrist, Macron, winning ensuring a calm and stable transition. If LePen (from the right) or Melechon (from the left) figure, then markets will panic. These two candidates are considered radical and both promise the demise of the EU and the EURO.

Meanwhile French/German/EU Manufacturing/Services/Composite PMI all showed solid gains across the board, but this was not reflected in the currency, as the EUR dipped below 1.0700. The EUR is likely to enter a period of extreme volatility during the period leading up to the run-off election date. The coming week features a great deal of global economic data releases, headlined by US GDP, punctuated by the ECB rate decision. The French elections and Geo-Political hot spots will continue to drive markets.

Collinson FX Market Commentary - Apr 21 - NZD struggles

Treasury Secretary Mnunchen triggered a big rally in US equities, promising the new tax package was close, confirming the biggest platform of economic reform. Weekly Jobless Claims rose along with Leading Indicators, although the Philly Fed report dropped sharply, as Oil prices stabilised.

The Dollar was steady, while a contraction in EU consumer confidence was not a surprise ahead of the first round of the French Presidential elections. The election is a likely source of instability in European markets until the run-off.

The EUR held 1.0700, while the GBP is consolidating the lofty gains posted by the snap-election, as elections dominate markets. Commodities currencies were steady, with the AUD moving above 0.7500, while the NZD is battling to hold 0.7000.

Collinson FX Market Commentary - Apr 20 - AUD drops on confidence loss

Apr 20 - European markets are under pressure with the arrival of the French elections. It look like a right-left run-off is the likely result but on the extremes. LePen and a candidate from the left will go through to a final run-off. This will drive markets into a nervous period, as speculation of the possible repercussions of a win by the Nationalists, centre around the the EU.

The whole EU would be over, as we know it, not to mention the single currency. The GBP has consolidated the massive gains booked, post the snap election call, despite the recovery in the Dollar. The EUR drifted back to 1.0700, while the GBP held above 1.2800, with firm trade data and benign inflation. US equity markets lost ground after top line numbers from IBM disappointed.

The Biege Book is likely to confirm rate rises, but this is conditional on economic progress, which will require legislative progress on taxes and health. The rising reserve is testing the 0.7000 number on the NZD, while the AUD fell below 0.7500, with softening Consumer Confidence.

Collinson FX Market Commentary - Apr 19 - Early election jumps UKP

Apr 19 - Markets remained pre-occupied with Geo-Political events engulfing the globe. North Korea continues to threaten nuclear war while the Middle East remains mired in conflict. European markets were thrown a curve ball, when UK PM May called for an early election, while the pending French election has the prospect of upending the EU.

The snap election in the UK is seen as an opportunity to consolidate and validate the Tory Govenrment leading in to Brexit. This surprised markets and the GBP surged to 1.2835! US Housing Starts contracted 6.8%, although Building Permits expanded 3.6%, while earnings eroded the previous gains.

The reserve softened allowing, the NZD to consolidate above 0.7000, supported by dairy prices. The RBA minutes confirmed the challenges of economic transition and the continuation of soft Monetary policy, giving the AUD little momentum, trading around click here and here Or for the latest update click here

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