Collinson FX Market Commentary- May 23 - AUD conflicted by weak demand

by Collinson FX on 23 May 2015 Collinson FX market Commentary: May 23, 2015 - AUD conflicted by weak Click here to find out how to get CollinsonFX's free iPhone app

May 23 - Equities completed a nondescript week with no real market moving data and little to define the Geo-Political issues. Greece will negotiate a compromise because the EU does not need a fissure and the Ukraine will be ignored as much as possible. The people are rioting in Kiev to protest the corrupt new 'democratic regime' and all the blessings showering them! The Russians are coming!

In the US, inflation was positive, thus giving Fed Chair Yellen, an opportunity to speculate an interest rate rise. There are many reasons why this will not happen. The economy, debt repayments etc etc! The Dollar was impacted accordingly, with the EUR falling to 1.1000, while the GBP drifted below 1.5500.

The AUD remains conflicted by the weak demand for commodities, dropping to 0.7800, while the KIWI continues to consolidate above 0.7300. Interest rate differentials remain attractive and support the 'once rock-star' economy!

The coming week will bring no major surprises on the economic front but may deliver some adverse Geo-Political surprises form within Europe or the Middle East.

Collinson FX market Commentary: May 22, 2015 - Economic data fails to exciteDoubts on US recovery

May 22 A wealth of economic data failed to excite markets although equities still trade at close to record levels. The Greek situation is said to be on the verge of settlement, although this has been said for years, while the Ukrainian situation escalates to all-out war. Europe remains in flux, floating between economic and military turmoil, still markets continue to reflect the abundance of liquidity. European Manufacturing and Composite PMI was flat across the EU, although worryingly, Germany slipped.

The EUR bounced to 1.1125, while the GBP jumped to 1.5670, boosted by a jump in local Retail Sales. The Philly Fed and Chicago Fed both lost ground, defying talk of a recovery in Manufacturing, while Existing Home Sales contracted 3.3% contradicting housing data earlier in the week. The US economy is, at best, mixed. This ensures a continuation of supportive monetary policy and no interest rate rises.

Chinese PMI Manufacturing data remained below 50, reflecting continued contraction, which has not helped commodity demand or prices. The AUD has now shed much of recent gains, trading below 0.7900, while the KIWI struggles to consolidate above 0.7300 despite the massive support from interest rate differentials. Economic data will continue to dominate markets while Geo-Political events could threaten.

Collinson FX market Commentary: May 20, 2015 - US flat-lines on surging data

May 20 - US Equities flat-lined overnight despite a massive surge in housing starts and building permits. US Housing Starts jumped over 20%, while building permit leaped 10.1%, reversing recent inertia. The Dollar continued to recover, with the EUR falling to 1.1150, while the GBP dipped to 1.5500. European markets jumped, after a warning for Greece from Merckel, setting a deadline of 12 days.

The all important ZEW German Sentiment report collapsed reflecting some dire confidence issues in the largest European economy. The resurgent Dollar was reflected in the commodity currencies, with the AUD falling to 0.7900, while the NZD slipped back well below 0.7400. Australian consumer confidence bounced but the real story is the 'Big Dollar'! Economic data will drive sentiment and perception which will be reflected in the markets.

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