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Collinson FX Market Commentary- April 20, 2013 - Week closes quietly

by Collinson FX on 21 Apr 2013
Georgia Racing and Wired - 2013 Auckland Cup, Day 3 © Richard Gladwell www.photosport.co.nz

Collinson FX market Commentary: April 20, 2013

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Markets were quiet to close a negative week with the US preoccupied with the Marathon bombing and the hunt for the bombers. The fallout will evolve in the new week with developments impacting markets.

Next week will see important data releases from Europe and the US while Asia will focus on Chinese PMI and Japanese Central Bank moves.

The KIWI will be watched closely with the Reserve Bank announcing a rate decision during the week. There are no real expectations of moves either way. The commodity currencies were unsettled by the instability during the week and look vulnerable. The AUD has slipped below 1.0300 and the KIWI sitting just below 0.8400. Markets will be tentative as Geo-Political developments unfold.


Collinson FX market Commentary: April 19, 2013

Equities continued to tumble with economic fundamentals starting to impact the LaLa land the bulls have been occupying this year. The domestic terrorism has brought some introspection on markets and allowed reality back into the equation. This has also caused some questions to arise in Asia and the microscope has focused on Chinese growth.

The numbers are starting to disappoint and warning signals are flashing with regards domestic debt levels and real estate bubbles. This has impacted commodities which have seen a major correction and impacted associated currencies.

The AUD trades around 1.0300 and the NZD is struggling above 0.8400 with local Consumer Confidence rising but the walls are closing in.

Earnings in the US are in line but top line revenues are not meeting expectations which is undermining confidence as productivity gains can only go so far without impacting capacity. It does seem the May mood is immersing the markets early!


Collinson FX market Commentary: April 18, 2013
Equities took another big hit sparked by increasingly bad news from Europe. Egan-Jones downgraded Germany and New Vehicle Sales fell by more than 10% setting a worrying trend. The fear that Germany would join the malaise is fast becoming a reality.

The EUR traded 1.3020 and the GBP 1.5230 which is not hugely significant considering the growing heat from the 'currency wars'. In the US, the Beige Book came in expectedly weak with modest to moderate growth across most regions. The uncertainty from US domestic terrorism and instability from North Korea and Europe are now impacting markets.

Risk appetite is under pressure and this is reflected in commodities and associated currencies. The AUD fell below 1.0300 and the KIWI 0.8430.


Collinson FX market Commentary: April 17, 2013

Markets were hit hard after the terrorist attack on the Boston marathon. The first major terrorist attack on the US mainland since 9/11 has shaken America and the markets. Markets were lower as sentiment had slipped earlier with the major hit to commodities lead by the collapse in Gold.

The rebound occured overnight with the DOW making triple digit gains and Gold rebounding strongly. This was expected and the question is to the validity of the recovery or a 'dead cat bounce'? In Europe things continue to unwind economically with the German and EU ZEW Economic Sentiment reports released and disappointing. These indicators are a very important litmus tests for the state of the EU economy and both have been hit hard reflecting the dire state of the single market. In the US, earnings continued to add to the confidence of the Bulls and Housing Starts rose 7%. Unfortunately Building permits fell 3.9% contradicting the data in this sector.

The Fed continues to keep the foot flat to the floor pushing risk assets higher crushing the negative economic fundamentals revealed by statistics. The inexorable rise in equities continues and to buck Bernanke is standing front of the runaway freight train!

This has given solace to the commodity currencies who drew confidence from the rebound with the AUD moving back to 1.0380 and the KIWI to just under 0.8500. The Bull run has resumed although Geo-Political issues remain a major obstacle with real economic realities hitting home. May is on the way!


Collinson FX market Commentary: April 16, 2013
Explosions around the Boston marathon has sent fear through markets. Equities crashed after domestic terrorism again hit the USA. Responsibility has not yet been claimed, or afforded, but it does seem terrorism has again hit at the heart of America, the Boston Marathon.

Equities were hit hard, with the Dow down 200, and associated risk assets also taking it on the nose. The AUD was impacted earlier after Chinese data concluded a fall in growth. Chinese GDP only grew at 7.7% missing the expectations of 8%. Industrial Production was lower, dipping below 10%, although it is hard to gauge the value of Chinese statistics. It is more a directional movement and this is the wrong way!

The main commodity currency has fallen from 1.0500 to trade 1.0350 and the KIWI below 0.8400 after testing 0.8600. Fear and instability always test risk markets and terrorism on American soil will scare many. It is not hard to guess the source.

Developments will determine the direction of markets, short term, but the fundamentals will probably enhance these instabilities. May is on the way!

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