Collinson FX Market Commentary - Nov 30 - Oil drops to $45/barrel
by Collinson FX on 30 Nov 2016
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Collinson FX Market Commentary - Nov 30 - Oil drops to $45/barrel
Nov 30 - The Trump rally resumed normal, post election, behaviour. Rising confidence in markets, driven by an expansionary fiscal growth strategy, has filled economic markets with positive sentiment. The sentiment is driving related economic data, with House Prices and consumer confidence, on the rise. This will in turn lead to a boost to investment, thus pushing harder economic data north, with improved growth and employment. The Case Shiller Home Price index rose 5.46%, while consumer confidence surged, to break above 107!
US GDP numbers also pushed higher, to 3.2%, while French GDP remained static. EU growth and sentiment is a massive contrast to the ebullient space the US finds itself in. OPEC confidence is low, with a diverse group not expected to agree to any supply restrictions, pushing Oil back to $45/barrel. The Dollar was quiet, with the EUR edging back above 1.0600, while the Yen trades 112.50.
The Fed is expected to raise rates in December, following market direction, which should support the Dollar 'bull-market'.
The USD has settled into a lull, which has boosted resurgent commodity prices, as growth drives demand. The associated currencies have been beneficiaries, with the NZD breaking 0.7100, while the AUD looks towards 0.7500. A strong dollar will balance commodity rallies, dampening enthusiasm for the related currencies, but cross rates (JPY and EUR) should improve.
Collinson FX Market Commentary - Nov 29 - Iran undermines oil price
US markets retreated, after the long Thanksgiving weekend, with both the Dollar and equities giving up ground. Oil prices are being watched closely, with OPEC meeting this week, all keenly awaiting the outcome. Iran has re-entered the market and this has undermined any supply caps previously agreed.
The Dollar has given up ground to the abrasive commodity currencies, driven by demand factors, allowing some recovery. The KIWI has spiked back to 0.7050, while the AUD has pushed to 0.7460, boosted by the perceived US growth led recovery. The EUR continues to flail, trading 1.0580, while the Yen recovered to 112.25.
The Trump rally looks set to continue and a slew of economic data releases may be improved by sentiment rather than actuality
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