Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- August 23, 2013 - NASDAQ turmoil

by Collinson FX on 24 Aug 2013
- Day 4, Oceanbridge Sail Auckland 2013 © Richard Gladwell http://www.richardgladwell.com

Collinson FX market Commentary: August 23, 2013

http://itunes.apple.com/app/collinsonfx/id533360650?mt=8!Click_here to find out how to get CollinsonFX's free iPhone app

US Equity markets were in turmoil after the NASDAQ fell over! The computer driven, Tech-stock market, was closed mid-way through the days trade and hopes were that they could open prior to the close. Equities were higher in the DOW and S&P after some serious losses emanating from the pending tapering from the Fed. Momentum was gained from positive economic news from Asia and Europe.

The Chinese Flash Manufacturing PMI broke above 50 and EU PMI numbers also gained, renewing confidence in the global economic recovery. Energy prices rose and Metals also gained, giving some hope to the recently recalcitrant AUD. The commodity driven currency has reflected weakening prices and a resurgent USD but has dug in it's toes around the 0.9000 level.

This can not be said for the country KIWI cousin which has collapsed to 0.7810 after some interference from the RBNZ, falling Agriculture prices and a stronger reserve measure. This rebound in markets is probably temporary, as recent trends are lower due to tapering adjustments in US markets.


Collinson FX market Commentary: August 22, 2013

Equity markets remained weaker in the lead up to the Fed minutes release in the US before the close. The minutes revealed that the members all agreed with the reduction of QE later this year assuming the economy continues to improve. Some members advocated an even earlier reduction in stimulus.

This was in line with market expectations and so equities rebounded strongly on the 'buy the rumour...' trade. The news is still not great for equities and bonds and the digestion of the minutes should result in further downside. The reduction of QE will reinvigorate the Dollar and this was reflected in the EUR which fell to 1.3350 although the Pounds recent strength held, trading 1.5645.

NZ Credit card spending increased 4.7% but the downward pressure from RBNZ antics and a rising USD pushed the KIWI down to 0.7850.

The AUD also has been impacted by the rally in the reserve currency breaking the big figure of 0.9000! Speculation over the effect of economic data on Central Bank action will remain the driver of equity, bonds and currency markets.


Collinson FX market Commentary: August 21, 2013
Asian equity markets tumbled after concerns over the end of the Central Bank bubble in US equities as bonds continued to sound shrill warnings. The Sell-off across Asia was stabilised in Europe and turned to the positive by the time US markets opened. There were no major economic data releases in the US which meant reduced speculation on the Fed's 'tapering' program.

Good news has recently been a negative, as it supports the tapering in Central bank monetary policy and bad news was treated as 'bad news' pushing equities lower and bond yields higher! This is a reversal of the same inversed phenomena that caused recent rallies!? Go figure!? The Chicago National Activity Index dropped, but in line with expectations, so markets will eagerly await tonight Housing data release in the US. The EUR regained 1.3400 and the GBP continued to book gains, trading 1.5675.

The AUD suffered during domestic trade after the RBA Minutes confirmed the parlous state of economic and budgetary affairs but will resist further cuts before the election. The AUD looked to test the big, big figure of 0.9000 but rebounded back to 0.9080 as US markets improved. The KIWI traded below 0.8000 after the RBNZ acted to impose restriction on mortgage ratios on banks.

The intervention is a vain attempt to control the booming property market in Auckland while not raising rates and thus the NZD. Unintended consequences! Look for further downward pressures in US Equities and Bonds as tapering approaches and this will drive markets!


Collinson FX market Commentary: August 20, 2013
The momentum of the last week continues with further pressure on equities. US markets were unable to break the inure that has siezed stock markets due to the threat of reduced stimulus. It is hard to believe that markets are so inflated and swamped in liquidity, but here we are!

The Dollar remains relatively strong due to similarly adopted Monetary policy by global counterparts. The ECB has followed the monetary expansionism and this has reduced the impact of the USD which trades 1.3333. The Bank of England has also participated in monetary largesse, due to insurmountable debt and deficit, with growth the only redeemable option. Fiscal rectitiude is the solution and the UK has invested with returns reflected in the GBP, which has moved back to 1.5650.

Bernanke will act to preserve what little historical relevance he may have but it will be too little too late! Greenspan is blamed for the same monetary vandalism that Bernanke will be. They have overplayed their hands due to Governmental incompetence and fiscal ineptitude. The experiment with the left has failed miserably and the people will recognise that emotional social wish lists never avail themselves to reality. Social progress only comes through growth and conservative economic budgeting.

Australia is learning this hard lesson with an exponential growth in debt and an uncontrolled budgetary abuse. Interest on debt has become a major component of Governmental expenditure and the budget has now become structurally broken. It appears the people will right the wrong and this may be reflected in the currency which has recovered to 0.9110 after hitting 0.9200 in yesterdays trade.

The KIWI has improved back to 0.8070, after earlier hitting 0.8100, with economic conditions slowly improving. Commodities dipped due to demand pressure which has been hit by international markets. Look to further growth prospects globally to determine central bank policy and thus equity, commodity and currency markets.

For more on Collinson FX and market information see:
www.collinsonfx.com and www.collinsonwealthmanagement.com

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.

Collinson and Co

Related Articles

America's Cup - Arbitration Panel Hearing over Kiwi Qualifier for July
ACEA CEO, Russell Coutts has confirmed that the Arbitration Panel will hold its first Hearing in July. In a yet to be published interview in Sail-World, America’s Cup Events Authority CEO, Russell Coutts has confirmed that the Arbitration Panel will hold its first Hearing in July. This is the first official indication that the three person Arbitration Panel had even been formed, however Sail-World’s sources indicated that it had been empanelled since last January, possibly earlier.
Posted on 27 May
Rio 2016 - The Qualification Games - Part 2
Yachting NZ's refusal to nominate in three classes won in the first round of 2016 Olympic Qualification is unprecedented Yachting New Zealand's refusal to nominate in three classes won in the first round of 2016 Olympic Qualification is without precedent. Subject to Appeal, the Kiwis have signaled that they will reject 30% of the positions gained in the ISAF World Sailing Championships in Santander in 2014.
Posted on 22 May
Gladwell's Line - World Sailing changes tack after IOC windshift
Over the past year, we've given the International Sailing Federation (now re-badged as World Sailing) a bit of stick Over the past year, we've given the International Sailing Federation (now re-badged as World Sailing) a bit of stick. Every blow well earned over issues such as the pollution at Rio, the Israeli exclusion abomination plus a few more. But now World Sailing is getting it right.
Posted on 21 May
Rio 2016 - The Qualification Games - Part 1
Antipodean selection shenanigans aside, the Qualification system for the Rio Olympics appears to be achieving its goals Antipodean selection shenanigans aside, the Qualification system for the Rio Olympics appears to be achieving goals set in the Olympic Commission report of 2010. Around 64 countries are expected to be represented in Rio de Janeiro in August. That is a slight increase on Qingdao and Weymouth, but more importantly a full regional qualification system is now in place
Posted on 19 May
Taming the beast-a conversation with Stuart Meurer of Parker Hannifin
While AC72 cats were fast, they difficult to control, so Oracle partnered with Parker Hannifin to innovate a better way. If you watched videos of the AC72s racing in the 34th America’s Cup (2013), you’re familiar with the mind-boggling speeds that are possible when wingsail-powered catamarans switch from displacement sailing to foiling mode. While foiling is fast, there’s no disguising the platform’s inherent instability. Now, Oracle Team USA has teamed up with Parker Hannifin to innovate a better way.
Posted on 18 May
From foiling Moths to Olympic starting lines-a Q&A with Bora Gulari
Bora Gulari’s is representing the USA at the Rio 2016 Olympics in the Nacra 17 class, along with teammate Louisa Chafee. Bora Gulari (USA) has made a strong name for himself within high-performance sailing circles, with wins at the 2009 and 2013 Moth Worlds. In between, he broke the 30-knort barrier and was the 2009 US SAILING Rolex Yachtsman of the Year. His latest challenge is representing the USA at the Rio 2016 Olympics in the Nacra 17 class as skipper, along with his teammate Louisa Chafee.
Posted on 12 May
Concern for Zika at Rio Olympics is now deadly serious
Alphabet soup is one description that has thus far not been used for either Guanabara Bay, Alphabet soup is one description that has thus far not been used for either Guanabara Bay, or the Rio Olympics. Many others have, and they were apt, but things have changed. So here now we have a situation where one man, Associate Professor Amir Attaran, who does have a more than decent string of letters after his name, is bringing nearly as many facts to bear as references at the article's end
Posted on 12 May
The importance of being Alive
Since buying the stunningly pretty Reichel-Pugh canting keel 66-footer, and re-naming her Alive, Since buying the stunningly pretty Reichel-Pugh canting keel 66-footer, and re-naming her Alive, the team have lined up for a lot of things, won plenty and nabbed a record, as well. She’s presently in a yard in the Philippines having a minor refit in readiness for the Australian season. It will commence with the upcoming Brisbane to Keppel and then head sharply into this year’s Hobart.
Posted on 10 May
Zhik - The brand born of a notion, not its history
here is probably every reason that ocean rhymes with notion. Zhik’s tagline is officially marketed as Made For Water There is probably every reason that ocean rhymes with notion. Zhik’s tagline has been officially marketed as Made For Water, and this is precisely what the company has done for the last eight years before the succinct and apt strapline came from out of R&D and into mainstream visibility.
Posted on 8 May
Shape of next Volvo Ocean Race revealed at Southern Spars - Part 1
Southern Spars has been confirmed as the supplier of spars for the 2017-18 Volvo Ocean Race. In mid-April, Race Director, Jack Lloyd and Stopover Manager Richard Mason outlined the changes expected for the 40,000nm Race during a tour of Southern Spars 10,000sq metre specialist spar construction facility. A total of up to seven boats is expected to enter, but time is running out for the construction of any new boats.
Posted on 3 May