Collinson FX Market Commentary - Nov 14 - Oz Government under siege

by Collinson FX on 14 Nov 2017 Collinson FX Market Commentary - Nov 14 - Oz Government under siege

Markets opened the week quietly, with little economic data being released, globally. The focus in Europe fell upon a speech from ECB VP Vitor Constansio, who lauded the actions of the ECB, post-GFC. He pointed out the rising growth and flat inflation citing, a 'broad-based, robust and resilient recovery' but admitted it was not 'self-sustained' and required further accommodative monetary policy.

He must be admired for the optimistic view of an economy that has struggled over the 10 years since the GFC. The EUR traded 1.1650, while the GBP slipped to 1.3120, reflecting a steady reserve. In the US, attention remained on the prospects of tax-reform, which is in the balance.

The AUD drifted to 0.7620, with chaos reigning in Canberra, as the eligibility issue spirals out of control. The Government is under siege and the instability is not inspiring confidence in markets. The NZD slipped back below 0.6900, a reflection of the reserve, rather than any local events.

Collinson FX Market Commentary - Nov 13 - Swamp committed Trump failure

Global equity markets continued to drift lower, as substantial US Tax reform, became less likely. The US congress has diluted any substantial tax reform and is not likely to pass even that. The US Treasury Secretary has warned of a massive correction in markets, if Congress fails to do their job, which is likely. Trump has done all he can, by executive order, but the swamp is committed to his failure.

UK Industrial/Manufacturing Production was strong, in line with recent data releases, despite recent doomsday predictions. The GBP regained 1.3200, while the EUR pushed back to 1.1650, with the reserve suffering under tax reform complications. The NZD failed to hold the recent rally, drifting back to 0.6900, while the AUD traded around 0.7650. Political complications surrounding the 'eligibility issue' threaten the Government in Australia and uncertainty is bad for currencies and equities.

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