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Collinson FX Market Commentary- July 17, 2012 - Slow global growth

by Collinson FX on 17 Jul 2012
Triple take - Nearing the finish of the first of the SSANZ Short handed Series - 2012 © Richard Gladwell www.photosport.co.nz

Collinson FX market Commentary: July 17, 2012

Further grim news from China and Europe failed to spark any risk rally with US Retail Sales confirming the conservative character of the consumer.

In China, the Premier promised further action to stimulate the slowing economy translating that they are in some trouble. The IMF, has warned of continued slowing global growth unless Europe can address the debt crises. It is hard to see a solution in the short term and little will be done in the US with November Presidential elections.

The best to hope for would be the maintenance of the status quo and sideways moves until political solutions are forthcoming. Retail Sales in the US fell 0.5% reflecting the confidence of the all important US consumer.

The consumer is unlikely to spend and capital is likely to remain on the sidelines until decisions are made! Markets will now be looking to a move to 'real QE3' and not just operation twist so concentration will be on Bernanke when he appears before the Senate and House Tuesday/Wednesday. Expectations are for a new repurchase program to pump more liquidity into markets and print more money. What a great idea as this confirms the definition of insanity. New York Manufacturing showed some signs of life but widespread recovery in this sector is unlikely.

The Dollar has retreated on the market expectations with the EUR bouncing to 1.2275. Commodity currencies found support with weak Dollar prospects and the AUD rose back to 1.0250 and the KIWI 0.7970. Economic data will determine some market direction but Bernanke will be key overnight.

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