Collinson FX Market Commentary - Oct 14 - Market procrastination

by Collinson FX on 13 Oct 2017 Market Commentary - Oct 14 - Market procrastination

US equity markets continued to trade around record highs, supported by strong economic data and sentiment, while corporate earnings remain robust. Major US banks have been reporting healthy earnings, and the prospect of a rising interest rate environment only enhances prospects. US Weekly Jobless Claims drifted, in a slow economic data day, allowing Bond yields to soften.

The GBP continues to book gains, pushing up to 1.3270, while the Yen traded around 112.00. EU Industrial Production jumped 1.4%, confirming the recent slew of strong economic data in the single zone, allowing the EUR to hold 1.1825. Commodity currencies found some legs, with the AUD pushing through 0.7800, while the NZD managed to regain 0.7100.

Political games continue on the NZ political front, with kingmaker Winston Peters, deferring any decision on the new Government another week. Peters is loving his time in the Sun, but uncertainty is not a welcome ingredient to market confidence, while both the public and business tire of his procrastination.

Market Commentary - Oct 13 - US markets booming

The Fed released their latest minutes from September, confirming a rate rise in December, while the $4.5 Trillion balance sheet would 'roll-off'. The tightening monetary policy is expected to continue in to the new year as growth in the economy flourishes. The strength of the economy is expected to withstand the shift in monetary policy, with the stock market continuing to grow, despite the reduction in monetary stimulus.

Trump tweeted that tax reform would ensure the stock market rally would move ahead in 'leaps and bounds'. Markets are booming, with equities at record levels, while interest rates are rising to combat inflation. The Dollar was steady, with the EUR trading up to 1.1850, while the GBP was steady above 1.3200. Commodity currencies consolidated, with the AUD holding around 0.7780, while the NZD settled above 0.7050.

A decision in the NZ election is expected today, with the NZ First king-maker Winston Peters, expected to announce his decision. The impact on the currency is predictable, with a National lead coalition being positive, it is just the magnitude of moves that is yet to be determined?

[Sorry, this content could not be displayed]
Market Commentary - Oct 12 - Federal Reserve confirms rate rise

The Fed released their latest minutes from September, confirming a rate rise in December, while the $4.5 Trillion balance sheet would 'roll-off'. The tightening monetary policy is expected to continue in to the new year as growth in the economy flourishes. The strength of the economy is expected to withstand the shift in monetary policy, with the stock market continuing to grow, despite the reduction in monetary stimulus.

Trump tweeted that tax reform would ensure the stock market rally would move ahead in 'leaps and bounds'. Markets are booming, with equities at record levels, while interest rates are rising to combat inflation. The Dollar was steady, with the EUR trading up to 1.1850, while the GBP was steady above 1.3200. Commodity currencies consolidated, with the AUD holding around 0.7780, while the NZD settled above 0.7050.

A decision in the NZ election is expected today, with the NZ First king-maker Winston Peters, expected to announce his decision. The impact on the currency is predictable, with a National lead coalition being positive, it is just the magnitude of moves that is yet to be determined?

Market Commentary - Oct 11 - KIWI remain in Irons

Equities continued to move up in to record territory, supported by market confidence, due to economic data and promised tax reform in the US. Corporate activity, in the form of a massive buy-back from Walmart ($20 Billion), while Honeywell and Pfizer announced massive restructuring.

Equities have been on a huge Trump rally all year supported by sentiment, economic data and action. Trump has used executive action and deregulation, but now needs support from congress, in the form of legislative action. German Trade showed relative strength, with jumps in both exports and imports, while the UK showed steady rises in both Manufacturing and Industrial Production.

The EUR jumped to 1.1800, while the GBP hit 1.3200, as GDP data drifted. Commodity currencies remain vulnerable, with the AUD trading below 0.7800, while the NZD holds 0.7050. The KIWI remains in irons, awaiting the outcome of political negotiations, post election.

Market Commentary - Oct 9 - US economy improves further

Non-Farm Payrolls contracted for September, largely attributable to the hurricanes that hit Texas, Florida and Puerto Rico, while the unemployment rate continued to fall (4.2%).

The disappointment was short-lived as markets digested and moved on. Average earnings rose, and the US labour remains strong and healthy. The Dollar remained steady, with the EUR trading 1.1730, while the GBP slipped to 1.3050. Commodity currencies have been victims of the resurgent Dollar, with the AUD falling to 0.7777, while the NZD dipped below 0.7100.

The coming week will be highlighted by growth, in the form of inflation and GDP numbers, in both the US and Europe. Trade data, from China and Europe, will also impact commodity currencies in the form of demand pressure. NZ final election tallies are released over the weekend, so negotiation may commence. Let the games begin!

Market Commentary - Oct 5 - Brexit pressures on UK

Oct 5 - The Dow continued to surge in to record territory, fuelled by low interest rates, deregulation and the prospect of massive tax cuts. Confidence has been building, along with economic prospects, globally. The Dollar has also found some recent support, with the EUR slipping to 1.1740, while the Yen trades up to 113.00.

The GBP has underperformed, due to 'Brexit' pressures, back to 1.3240 after lower construction data. The RBA left rates unchanged, at 1.5%, a 14 month trend with no near-term prospect of a change. This initially hit the vulnerable AUD, falling below 0.7800, but recovered in overnight trade. The KIWI has been the underachiever, on the global stage, undermined by the doubt created by the political situation.

The NZD fell back below 0.7150, uncertainty dominating the local market, while the Dairy Auction sales were also weak. The political situation must be addressed to right this ship. That would require some adult negotiations, working towards a sensible outcome, taking ego out of the situation.

[Sorry, this content could not be displayed]
Market Commentary - Oct 4 - NZ ship needs to be righted

Oct 4 - The Dow continued to surge into record territory, fuelled by low-interest rates, deregulation and the prospect of massive tax cuts. Confidence has been building, along with economic prospects, globally. The Dollar has also found some recent support, with the EUR slipping to 1.1740, while the Yen trades up to 113.00. The GBP has underperformed, due to 'Brexit' pressures, back to 1.3240 after lower construction data.

The RBA left rates unchanged, at 1.5%, a 14-month trend with no near-term prospect of a change. This initially hit the vulnerable AUD, falling below 0.7800, but recovered in overnight trade. The KIWI has been the underachiever, on the global stage, undermined by the doubt created by the political situation.

The NZD fell back below 0.7150, uncertainty dominating the local market, while the Dairy Auction sales were also weak. The political situation must be addressed to right this ship. That would require some adult negotiations, working towards a sensible outcome, taking ego out of the situation.

Market Commentary - Oct 3 - Markets shocked by shooting

US Markets were overwhelmed by the mass shooting in Las Vegas, which killed 58 and wounded hundreds, shocking markets. This is likely the work of a deranged man, rather than the plight of recent Islamic attacks, revealing evil is not confined to religious zealots.

Equity markets were surging to record levels to begin another quarter of the 'Trump effect'. The massive rally in confidence is underwritten by executive actions but requires urgent legislative tax reform. The ISM Manufacturing number came in better than expected, outperforming the PMI data from Europe, which was reflected in the Dollar.

The EUR fell back to 1.1740, while the GBP broke lower, hitting 1.3280. Splits in the 'Tory Brexit' schedule undermines confidence, as Boris Johnson advocates a hard line exit, contradicting other senior conservatives. The Japanese Tankan report was extremely bullish, citing strong Employment, confidence and Capital investment. This sets the stage for a strong electoral performance from PM Abe.

The AUD drifted to 0.7820, while the NZD tested 0.7200, on the downside. Post election negotiations are yet to commence and inaction does not provide confidence, undermining markets.

For more on Collinson FX and market information click here and here Or for the latest update click here

Countries: | NZ: 0800 338 838 | AU: 1800 143 415 | NY: 1888 6257 833 | UK: 0800 0285 834 |

Disclaimer: The details expressed in this website and accompanying documents or transmissions are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Collinson Forex Ltd accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the information contained or related to this site