Collinson FX Market Commentary - Mar 25/26 - Trumpism now constipated

by Collinson FX on 27 Mar 2017 Collinson FX Market Commentary - Mar 25/26 - Trumpism now constipated

Republicans abondoned the Healthcare bill to replace Obamacare. This is the first big legislative step from the Trump administration and does not bode well for the coming agenda.

The market rally has been built on the positive pro-growth agenda the Trump administration has projected. This may well impact market gains and the currency. A surge in European PMI data was uniform across member states and the Services and Manufacturing sectors, but had little impact on markets, due to the constipation of the legislative process in the US.

The Dollar was also in irons, with the EUR trading around 1.0800, while the GBP remains 1.2500. Commodity currencies had shown recent resilience, despite weaker commodity prices, although the AUD has slipped back to 0.7620. The NZD has consolidated above 0.7000, with little impact from the RBNZ rhetoric and inaction, while economic data has been positive.

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Collinson FX Market Commentary - Mar 24 - US tetters on health vote

US Markets were in limbo overnight, awaiting the outcome of the Healthcare legislation vote, in front of the House. This is the first major piece of legislation and is a pre-requisite to tax reform and the Trump agenda. Failure at the first major hurdle, would have disastrous consequences, both politically and in the markets.

The Dollar and Equities rallied, pointing to a successful outcome, although time will tell. US New Home Sales jumped 6.1%, reversing recent poor data in the housing sector, while Kansas City Manufacturing also booked gains. The rally in the Dollar, pushed the EUR below 1.0800, while the GBP jumped above 1.2500 post-terror event.

The RBNZ left rates unchanged, as expected, observing weaker than expected growth allowing accommodative monetary policy. The Central Bank welcomed the weaker KIWI, while jawboning it lower, to little effect. The NZD held above 0.7000, despite a rising reserve, while the AUD continued to drift lower.

The AUD has slipped back to 0.7625, while the resilient KIWI will be tested again, with the release of todays trade numbers.

Collinson FX Market Commentary - Mar 23 - NZD rallies against trend

A terror attack on the British House of Parliament overwhelmed the news, with a four people dead, so far. Markets drifted lower, but remained calm, despite events.

US House Prices were flat, while Existing Home Sales contracted 3.7%, giving little to inspire markets.

Concerns remain over the first major legislation and the passage through Congress, with 'Trumpcare' up for a vote later tonight. This is the pre-requisite to tax reform and much of the agenda that has supported the rally in market confidence. The EUR held above 1.0800, while the Yen dropped below 111.00, as the Dollar answers some questions.

Commodities continued to lose ground and the AUD suffered, falling below 0.7700, while the NZD bucked the trend. The NZ Dairy Auction was surprisingly bullish, paving the way for a rally in the currency, pushing up to 0.7050. The RBNZ will announce the rate decision this morning, with no movement expected, although rhetoric is likely to impact. Commentary on the NZ economy and the Central Banks attitude towards monetary policy will drive the local currency.

Collinson FX Market Commentary - Mar 22 - GBP slips on Brexit news

Equities staged a dramatic reversal of fortune, with the DOW shedding over 200 points, casting a negative pall over markets. Investors were nervous about the prospects of the Trump administrations pro-growth policies progress through Congress. The healthcare reform was due in the House on Thursday, and this is a pre-requisite to Tax reform.

Oil prices resumed their downward moves, reflecting commodity prices, in general. This did not assist the associated currencies, with the NZD drifting to 0.7020, while the RBA impacted the AUD. The RBA minutes revealed concerns over the growing real estate bubble and weak wage growth, but it was the commentary on the US Dollar that hit the currency. The AUD fell below 0.7700, after the Bank observed the Feds 'rate rise policy', would impact negatively on the local currency.

The GBP jumped to 1.2480, supported by the certainty of a Brexit trigger data and stronger CPI numbers supporting growth. The EUR also jumped to 1.0800, as polls calmed fears that LePen would rise to the Presidency, which would threaten the single currency. Political developments in the US and Europe weigh heavily on markets, while commodity prices and economic data remain a daily influence, driving direction.

Collinson FX Market Commentary - Mar 21 - GBP slips on Brexit news

Markets opened the week quietly, in the US, with little on the economic data front to drive equities. A couple of Fed officials have been dovish in commentary, post the Fed announcement, regarding rate rises and accepting of inflation. This did little to support the Dollar, with the EUR rising to 1.0730, while the Yen held 112.50.

The GBP slipped after the UK PM, Theresa May, confirmed the trigger of Article 50 on March 29. Oil prices drifted lower and the Chicago Fed Manufacturing Activity Index remained positive. The softer reserve allowed commodity currencies to book further gains, with the AUD consolidating above 0.7700, while the NZD pushed towards 0.7050.

The USD has been restrained post the FOMC meeting, due to the dovish rhetoric, but the underlying strength should come to the click here and here Or for the latest update click here

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