Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- July 26, 2013 - Jawboning the rates

by Collinson FX on 26 Jul 2013
- 2013 420 Nationals Takapuna Richard Gladwell www.photosport.co.nz

Collinson FX market Commentary: July 26, 2013

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

Mixed economic reports in the US have lead to a 'will he ..... won't he?' on the tapering strategy Bernanke has telegraphed for QE Infinity. Durable Goods Orders rose 4.2% and the Kansas City Fed rose 1.4% giving the green light for possible tapering in September as previously indicated.

Jobless Claims rose and the lack of a continuous of improving data may tip the balance in favour of the status quo. Equities were weaker and commodities mixed as the Dollar dipped lower. This aided the EUR which moved back to 1.3250 and the GBP 1.5350 after UK GDP rose 0.6% for the quarter. Britain appears to be slowly emerging from a very tough post-GFC period with a country slowly improving economically as summer has brought buoyant spirits from sporting successes, fine weather and a new Royal!

The Reserve Bank left interest rates unchanged in NZ, with the usual hint at action if the housing bubble continues. Jaw-boning will not impact a market short on supply and long on demand. The Governor should look at the lack of inflationary pressures and growth in the economy and cut rates to stimulate the recovery and reduce the advantages most of its trading partners have been gifted!

The KIWI slipped earlier but surged overnight to trade above .8000. The AUD also suffered in domestic trade but the USD moves pushed the currency back to 0.9230. Economic reports and the impact on Central bank policy will continue to dominate equities, commodities and currencies!


Collinson FX market Commentary: July 25, 2013

Equity markets in Europe rallied overnight after some strong PMI data confirmed growth in both the Manufacturing and Services sector in the EU but this failed to contaminate the US market. US Equities corrected lower after a long string of recent rallies with further speculation surrounding the Fed's tapering program.

New Home Sales rocketed up 8.3% which boosted the the proviso of stronger economic data to enact a tapering of QE infinity. Commodities also drifted lower after China Flash PMI Manufacturing continued to contract falling back to 47.7. This impacted the AUD which declined after earlier domestic CPI showed inflation more than contained. Inflation needs growth and the economy is quickly deteriorating with political turmoil and failing Mining investment.

The effect has been pressure on the RBA to effect more rate cuts and downward pressure on the AUD. After testing the 0.9300 yesterday the AUD has been slammed back to 0.9150! The KIWI has also been impacted despite improving Trade Data (although this was due mainly to a fall in Imports, thus demand!) but not to the same extent as the cross tasman cousin.

The NZD gave up the important big, big figure of 0.8000 test and declined to 0.7930. Markets will continue to trade off economic data releases which will drive perception of Central Bank action. Keep an eye on the RBNZ who are expected to leave rates but may impact through Hawkish comments!


Collinson FX market Commentary: July 24, 2013

Equity markets hit new record highs in the US as the Feds QE Infinity continues to pump endless monetary stimulus, flooding Wall Street. There was little in the way of news releases with headline House Prices rising by 0.7% which was enough to boost equities to record highs and continue the strong demand for commodities.

The AUD has been a major beneficiary of recent gains reclaiming losses and testing 0.9300. The KIWI has also taken advantage, moving towards the psychological 0.8000 and looking strong with some important local trade data likely to give some lead on the external state of the trading nation.

In the US, the Richmond Fed Manufacturing Index declined, continuing the woes of this sector, but this was largely ignored in the equity rally.

Earnings have been mixed this season but all await Apple today, which has the ability to move the markets on its own!


Collinson FX market Commentary: July 23, 2013

Gold rallied strongly with the market realisation that Bernanke had no short term ambitions to end QE infinity.

The Dollar ebbed in conjunction, pushing the EUR up to 1.3180 and the GBP surged to 1.5350 with the Brits ecstatic over the prospect of a new Royal, Cricket ,T de F and anything but the economy. In the US, summer markets continue to trade thinly and await some big news.

They were quiet to open the week with Existing Home Sales falling 1.2% which missed expectations and is the first data release around this leading index. The Chicago Fed's National Activity Index also contracted with little good news but the Fed holds the equity market steady.

Energy prices drifted lower while metals rose with demand. The AUD caught the bounce and received an extra boost from the decline in the USD. The AUD moved back to 0.9230 and the KIWI is approaching 0.7950.

No scheduled Central Bank commentary allows the markets to absorb economic data releases and US earnings.

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 - Apr 28 - KIWI remains low
The NZD has plunged to 0.6875, while the AUD has slipped to 0.7470, despite relatively strong CPI data. The huge rally in equities was triggered by the French elections and sustained by the tax cut proposals by the Trump administration. Overnight Treasury Secretary Mnunchen revealed the 'biggest tax cuts in US history'! This policy must be passed in to legislation, which Trump has had limited success, to date.
Posted on 27 Apr
Collinson FX Market Commentary - Apr 27 - KIWI plunges
The NZD has plunged to 0.6875, while the AUD has slipped to 0.7470, despite relatively strong CPI data. The huge rally in equities was triggered by the French elections and sustained by the tax cut proposals by the Trump administration. Overnight Treasury Secretary Mnunchen revealed the 'biggest tax cuts in US history'! This policy must be passed in to legislation, which Trump has had limited success, to date.
Posted on 26 Apr
Collinson FX Market Commentary - Apr 26 - French joy but ANZAC slides
The AUD slipped back to 0.7525, while the KIWI plunged through 0.7000 Markets exploded in reaction to the first round of the French Presidential elections. The French CAC rallied over 4%, with Centrist candidate Macron, leading through to a run-off with LePen. Polls predict an easy win for Macron, who has been endorsed by the traditional left and right wing parties, but it is a two horse race?!
Posted on 25 Apr
Collinson FX Market Commentary - Apr 25 - Two week cruise to victory?
The AUD slipped back to 0.7550, while the KIWI looks to test 0.7000, on the downside Markets exploded in reaction to the first round of the French Presidential elections. The French CAC rallied over 4%, with Centrist candidate Macron, leading through to a run-off with LePen. Polls predict an easy win for Macron, who has been endorsed by the traditional left and right wing parties, but it is a two horse race?!
Posted on 25 Apr
Collinson FX Market Commentary - Apr 22 - Trump's action sparks rally
Markets rallied to close the week with Trump signing executive orders for tax reform and financial deregulation. Markets rallied to close the week with Trump signing executive orders for tax reform and financial deregulation. Tax reform is likely to come next week and financial deregulation is likely to come in the form of repeal of the Dodd/Frank legislation. This will release markets and fuel the rally. France hold the first round of the Presidential elections this weekend with the possibilities ensuri
Posted on 24 Apr
Collinson FX Market Commentary - Apr 21 - NZD struggles
AUD moving above 0.7500, while the NZD is battling to hold 0.7000. The EUR held 1.0700, while the GBP is consolidating the lofty gains posted by the snap-election, as elections dominate markets. Commodities currencies were steady, with the AUD moving above 0.7500, while the NZD is battling to hold 0.7000.
Posted on 20 Apr
Collinson FX Market Commentary - Apr 20 - AUD drops on confidence loss
The rising reserve is testing the 0.7000 number on the NZD, while the AUD fell below 0.7500 European markets are under pressure with the arrival of the French elections. It look like a right-left run-off is the likely result but on the extremes. LePen and a candidate from the left will go through to a final run-off. This will drive markets into a nervous period
Posted on 20 Apr
Collinson FX Market Commentary - Apr 19 - Early election jumps UKP
The reserve softened allowing, the NZD to consolidate above 0.7000, supported by dairy prices. European markets were thrown a curve ball, when UK PM May called for an early election, while the pending French election has the prospect of upending the EU. The snap election in the UK is seen as an opportunity to consolidate and validate the Tory Govenrment leading in to Brexit.
Posted on 19 Apr
Collinson FX Market Commentary - Apr 16 - Trump jawbones USD down
The commodity currencies surged, with the AUD jumping almost a big figure, to 0.7570. The commodity currencies surged, with the AUD jumping almost a big figure, to 0.7570. The KIWI was testing 0.6900, on the downside, but spiked towards 0.7000 with the Trump jawboning. The coming week is full of significant global economic data releases which will impact currencies while Geo-Political developments remain the major driver of any substantial moves.
Posted on 16 Apr
Collinson FX Market Commentary - Apr 13 - KIWI set to take a dive
The AUD fell back to 0.7475, while the NZD looks to test dangerous levels below 0.6900 The AUD fell back to 0.7475, while the NZD looks to test dangerous levels below 0.6900, despite steady commodity prices. Local House prices in NZ may have a marginal impact, along with Australian confidence data, but major directional drivers are coming from the USA. The AUD attempts to regain 0.7500, with local Consumer Confidence confirming rising sentiment, despite the reserve.
Posted on 13 Apr