Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- February 8, 2013 - Jawboning the Euro

by Collinson FX on 9 Feb 2013
Denmark 49er FX - Day 4, Oceanbridge Sail Auckland 2013 Richard Gladwell www.photosport.co.nz

Collinson FX market Commentary: February 8, 2013

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

ECB President Draghi decided to leave rates unchanged at 0.75% and jawboned the single currency lower with commentary. He sees risk to the downside within the ECB and the strength of the currency as a determining factor in the recovery.

The EUR plunged to below 1.3400 and the GBP steady at 1.5700. The Bank of England left rates unchanged and talked readiness for more stimulus. UK GDP remained at zero and Industrial and Manufacturing continued to slide. EU Ministers gather for the first summit since English PM Cameron vocalised the possibility of a withdrawal from the EU.

Threats to the Community have never been greater with Economic conditions worse than ever and a group of leaders incapable of solving the crises. In the US, Jobless Claims fell slightly and productivity fell 2% with labour costs rising 4.5%. The rise in Labour costs is great news for the worker but usually signals the rise of inflation.

This signal should be taken seriously because inflation is the biggest fear of most economists. Australian Employment remained steady but the nature of the measures are not to be believed. Full-time employment has been steadily on the decline while the numbers hold steady due to growth in part-time numbers.

Part-time is recognised as working 1 hour per week so the data is questionable at best! The AUD fell to 1.0280 and the KIWI slipped back to 0.8300.

The focus at the close of the week will be the EU summit and developments therein.


Collinson FX market Commentary: February 7, 2013

European leaders are set to gather to discuss current issues after what has been a bullish start to the year. All EU problems are behind them now they have solved the debt/deficit crises and have robust growth, solving all ills. Absolutely amazing that pundits accept the current economic/political situation with deficits running as high as ever, building ever increasing debt which is unserviceable in most cases.

The EUR retraced back to 1.3500 and the GBP continues to capitulate at 1.5650. In the US, there was little political or economic activity, in terms of releases, and the markets stuttered. All eyes will be on the ECB and the BofE later tonight with their take on the robust nature of the recovery. With little ammunition in the armoury, it will be about the commentary more than anything.

The situation remains dire and because the spotlight is off, little attention is paid. These problems remain and will come back to haunt investors. Bulls remain deluded and reality will eventually strike home with avengeance.

The AUD stumbled after Retail Sales contracted 0.2% as the political turmoil continues.

The AUD struggled to hold 1.0300 and looks set for further assaults despite the lack of action from the RBA. The poorer cousin, NZD, continues to hold above 0.8400 but remains tenuous.



Collinson FX market Commentary: February 7, 2013

The Dow broke through the all important 14,000 barrier for the first time since the global recession hit markets. The flood of liquidity must go somewhere and equities provide some return unlike fixed interest. The scramble to invest is a direct result of the panic to avoid 'missing the equity boat'!

Non-Farm Payrolls disappointed falling to 157,000 and Unemployment rose to 7.9% but this was ignored with 2012 data revised upwards and analysts confident the economy will support risk investments. The University of Michigan Confidence index surged to 73.8 reversing previous economic indicators. This was all the cash flush bulls needed and they jumped in boots and all. The record start to the year continues with gay abandon, fueled by Bernanke and wheelbarrows full of money.

The KIWI continued to reflect the assault on the USD, rising to just under 0.8450, after the RBNZ notably missed the opportunity to cut rates in response to the rising 'currency wars'. The AUD remained trading around 1.0400 as political turmoil engulfs the nation. The longest election campaign in history was closely followed by the arrest of crucial MP Thomson who props up this disastrous administration. The situation has deteriorated with a string of resignations from the cabinet as the rats abandon the sinking ship.

All eyes will turn to the RBA when they announce their rate decision with the heat on them to respond to the Fed and BoJ.

The coming week will continue to monitor the progress of the bulls on equity markets as technicals point to no ceiling in sight. ECB and the BoE will come into focus later in the week with little capacity to cut rates but their attitude to Money supply and commentary will have an impact.

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

Collinson FX Market Commentary - Aug 4 - Brexit bites
Weakness in commodity currencies continued, with the AUD drifting to 0.7440, while the NZD held 0.7430 The Bank of England Governor warned of threats to the UK economy, citing Brexit and the impact this may have on the economy.US Factory Orders continued to post gains, as did Durable Goods Orders, but this was qualified by a contraction in the ISM Non Manufacturing data.
Posted on 5 Aug
Collinson FX Market Commentary - Aug 3 - Apple has a blowout
The AUD floundered around 0.7960, while the NZD drifted back towards 0.7400, looking for direction. Apple exceeded all expectations on earnings and this pushed the Dow to a close above 22,000! The tech company beat on earnings on both above and below the line revenue. This enabled the DOW to push to yet another milestone. The Dollar continued to fade, with the EUR rebounding to 1.1850, while the GBP hit 1.3250.
Posted on 3 Aug
Collinson FX Market Commentary - Aug 2 - USD rebounds
The NZD was also hit by the rebounding Dollar, falling back towards 0.7450, The Dow surged through 22,000, making every post a winner, supported by market optimism and earnings. Equity markets have been soaring, with abounding confidence, since the election of President Trump. De-regulation is well underway, while the promise of tax reform has been a fundamental, thus essential to support the bull market.
Posted on 2 Aug
Collinson FX Market Commentary - July 30 - AUD rises higher
The reserve weakness has directly impacted the commodity currencies, with the AUD pushing towards 0.8000, Oil prices continued to post gains, pushing up to $48.50, as a direct result of the Russian led OPEC/Non-OPEC meeting. US Housing data continued to improve and this leading sector may lead the economy but tax reform is sorely needed. The flagging reserve allowed commodity currencies to continue to gain ground, with the AUD breaking above 0.7950, while the NZD pushed above 0.7450.
Posted on 31 Jul
Collinson FX Market Commentary - July 27 - Oil up after meeting
AUD breaking above 0.7950, while the NZD pushed above 0.7450. Oil prices continued to post gains, pushing up to $48.50, as a direct result of the Russian led OPEC/Non-OPEC meeting. US Housing data continued to improve and this leading sector may lead the economy but tax reform is sorely needed. The flagging reserve allowed commodity currencies to continue to gain ground, with the AUD breaking above 0.7950, while the NZD pushed above 0.7450.
Posted on 27 Jul
Collinson FX Market Commentary - July 25 - Oil production limited
The AUD has settled around 0.7900, with huge gains being digested, while the NZD spiked to 0.7450 OPEC and Non-OPEC Oil producers are meeting, with Russia taking a leading role, in an effort to limit production to reduce stocks. Oil has shown limited upside, in the last week, but remains fundamentally challenged. The oil price is the life blood of Russia and OPEC but demand and oversupply have limited any upside.
Posted on 25 Jul
Collinson FX Market Commentary - July 20 - Oil price slips up
The AUD has been surging strongly, trading around 0.7950, while the NZD has attempted to consolidate around 0.7350. Oil has quietly worked its way back to $47/barrel, in line with gains posted by other commodity prices, directly translating into stronger currencies. The AUD has been surging strongly, trading around 0.7950, while the NZD has attempted to consolidate around 0.7350. Eyes are firmly on the ECB and there actions. Expectations are for no rate change but for hawkish commentary from Draghi.
Posted on 20 Jul
Collinson FX Market Commentary - July 19 - US Rally hits wall
AUD rallying above 0.7900, while the NZD looks to 0.7350 The US Dollar continued to flounder, ahead of the ECB meeting, Thursday. The EUR rallied strongly, to 1.1550, with expectations of an end to the extreme monetary policy currently in place. The GBP did not react, holding around 1.3050, tempered by lower than expected inflation data.
Posted on 19 Jul
Collinson FX Market Commentary - July 18 - China has positive data
The AUD drifted below 0.7800, while the NZD held above 0.7300, awaiting important CPI data released today. Chinese economic performance translates directly into demand driven support for commodity prices. This allowed the currencies to consolidate after spiking at the close of last week. The AUD drifted below 0.7800, while the NZD held above 0.7300, awaiting important CPI data released today. The GBP traded 1.3050, while the EUR pushed towards 1.1500, ahead of the ECB meeting Thursday.
Posted on 18 Jul
Collinson FX Market Commentary - July 15-16 - US Dollar hit hard
The AUD jumped to 0.7820, while the NZD consolidated above 0.7300, echoing the global move against the Dollar. The AUD jumped to 0.7820, while the NZD consolidated above 0.7300, echoing the global move against the Dollar. The coming week will provide plenty of cannon fodder in the form of global economic data releases and Central Bank activity. The ECB will be a major influence, in the coming week, while RBA minutes and Employment data will drive local currency moves.
Posted on 17 Jul