Collinson FX Market Commentary - Jan 5 - Trump arrival drives markets
by Collinson FX on 5 Jan 2017
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Collinson FX Market Commentary - Jan 5 - Trump arrival drives markets
Jan 5 - Equity markets continued to book gains for the New Year ahead of the release of the Fed minutes. The minutes are expected to outline the considerations given to the second rate rise in 10 years and the thoughts behind the projected 3 rises indicated for 2017. The Fed did do the same for 2016, but failed to act, which is unlikely to happen considering the upheaval in US politics.
Trump has indicated a massive fiscal stimulus and dramatic tax reform, combined with deregulation, has seen confidence soar. European Services and Composite PMI managed to move in the right direction but the EU remains challenged. The Dollar has suffered some profit taking, with the EUR pushing back towards 1.0500, while the GBP broke above 1.2300.
The Dollar has rallied strongly, post US elections, with this trend likely to continue through the new year. The AUD took advantage of the retreating reserve, rallying strongly to 0.7270, while the NZD bounced off 0.6900. Economic data will continue to drive short term fluctuations of individual currencies while the underlying strength of the Dollar will continue.
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Collinson FX Market Commentary - Jan 4 - Markets open on positive note
Jan 4 - Stock markets opened on a positive note for 2017, boosted by strong manufacturing PMI data from China and the USA, providing a stable economic base for further growth. Chinese PMI rallied, as did the US PMI and ISM manufacturing, confirming a recovery in this sector globally.
The sharp rally in Chinese equities quickly translated into US markets, although the rally was not sustained, closing only slightly stronger. The Dollar continued to make ground, with the EUR falling back to 1.0400, while the Yen moved to 117.80. Australian Manufacturing PMI also booked gains and commodity prices jumped by 44.5. This allowed the AUD to shrug off the stronger reserve and consolidate above 0.7200.
The NZ Dairy Auction delivered weaker results, denting recent strength in the currency, although the KIWI still held 0.6900. Plenty of global economic data releases this week will paint the picture for the New Year. Weaker global economies lead to QE and a rally in equities in 2016, while stronger economic growth has lead to the prospect of improved earnings and a growth in equities in 2017!? The more traditional path is more desirable and sustainable.
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Collinson FX Market Commentary - Jan 2 - New Year data to define 2017
Jan 2 - The New Year will open with a plethora of global economic data releases, headlined by Manufacturing and Services PMI, closing with Employment numbers.
The data releases should define market direction to commence 2017 along with speculation of global economic conditions and Central Bank reaction. The year should see interest rates on the move north led by the USA, which should be reflected in the US Dollar.
The EUR will start the year at 1.0500, while the Yen will trade 117.00. The AUD will be above 0.7200, while the NZD sits around 0.6900, with both vulnerable to a surging US Dollar.
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