Collinson FX Market Commentary- November 1, 2014 - US off Fed's oxygen

by Collinson FX on 2 Nov 2014 Collinson FX market Commentary: November 1, 2014

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Nov 1 - Equity markets surged to close the week near record highs and well up after the Fed judged the economy well enough to survive without further monetary stimulus. Consumer confidence is high and the Dollar is recovering without the endless QE dilution.

The EUR plunged to 1.2525 while the GBP slipped below 1.6000 again. The new week will look closely at Manufacturing and Service PMI across Europe, Asia and the US. Important employment reports will also be released and Central Bank rate decisions in Europe and Australia. Geopolitical events remain a major threat to market confidence and seems the major negative in a bullish markets.

The AUDUSD suffered the rising Dollar falling to 0.8715 while the KIWI dropped below 0.7760. The NZD was unchanged against European partners, trading 0.6185 and 0.4840 against the EUR and GBP. However the NZDJPY cross has booked significant gains, currently great buying at 87.15.

Collinson FX market Commentary: October 31, 2014
Oct 31 - The DOW surged towards record levels after US GDP numbers confirmed the recovery is finally underway. The Fed are well aware of the state of the economy and could not continue QE. GDP rose 3.5%, for the quarter and has finally shown signs of life, in the worlds largest economy. Oil prices continue to act as a stimulus to the US and global markets. Europe may benefit from the recovery in the US but still remains mired.

The Dollar should make every post a winner as the Fed withdraws stimulus. The EUR traded 1.2600, while the GBP struggled to hold 1.6000. It is hard to see the UK really improve while the umbilical to Europe remains. The RBNZ threw the anchor out and held the interest rate rises. Reality hit home rather than a realization that their strategy is premature.

The KIWI staged a recovery, after the previous hit, triggered by a resurgent Dollar and now trades 0.7820 supported by a huge interest rate differential. The AUDUSD broke back through to 0.8810 with rising confidence. Some very positive moves in markets may test highs but geopolitical issues remain a constant threat and fiscal tragedy is inbred in the EU.

The NZD booked small gains against the EUR, GBP and JPY overnight to trade 0.6190, 0.4875 and 85.30 respectively.

Collinson FX market Commentary: October 30, 2014
Oct 30 - QE Infinity is finite and is now over! The fed cited the vast improvement in the Labour market, with the Unemployment rate falling below 6%, while inflation has remained benign. Now the review and analysis will begin into whether it worked or not!?

The Fed's Balance Sheet is still providing massive stimulus because of its extremely bloated state. The size of the balance sheet means that just reinvestment of maturing bonds will be a massive stimulus. Equities were lower and the Dollar higher. The EUR fell to 1.2640 while the GBP dropped to 1.6000. The Euro-zone remains in deep financial strife as they embark on their own QE program. The rise in the Dollar also boosted commodities but this was negated with the reserve impact on the associated currencies.

The AUDUSD dropped back below 0.8800, while the NZDUSD traded 0.7820, ahead of the RBNZ meeting today. All eyes will briefly focus on Wheeler this morning but expectations are for a halt to the damaging interest rate rises imposed on the local economy.

The RBNZ will today also release its FX Transactions data for September. After the August announcement of a $521 million net sale, it will not be unexpected to see more activity on this front. The NZD currently trades down against all major pairs, 0.6180 and 0.4870 against the EUR and GBP and 85.00 against the JPY.

Collinson FX market Commentary: October 30, 2014

Oct 29 - Markets regained some composure despite the threats of an Ebola crises. US equities booked gains ahead of the two day meeting of the Fed. Expectations are for the termination of QE Infinity although the uber-bloated balance sheet remains the the biggest monetary stimulus in the history of monetary policy.

US Consumer Confidence jumped while Durable Goods Orders fell sending mixed messages to markets. The EUR eked out slight gains to trade 1.2730 and the GBP moved to 1.6125. Commodities moved into positive territory dragging associated currencies with them.

The AUDUSD is looking to test 0.8840 while the KIWI traded 0.7905 ahead of the RBNZ meeting. Expectations are for them to desist from the current raising policy. There is a huge stimulus going on globally and that is the collapsing price of oil!

The AUD currently trades 0.6920 and 0.5470 against the EUR and GBP respectively with the AUDJPY trading 95.40.

Collinson FX market Commentary: October 28, 2014
Oct 28 - Banking and energy stocks lead equities lower in Europe. The ECB released Bank stress tests and failed some, as expected and it was these failures, that lead the Equity markets lower. The 'war on oil' continued with incredible machinations involved. OPEC appears to to be less than an united front, in the wake of the turmoil across the Middle Ease and the Saudi campaign to undermine neo-producers with high cost break-even production levels.

The EUR battled to hold 1.2700 while the GBP traded 1.6130. The ECB settle EUR1.7 Billion, in the first week of QE for Europe, with the hope that this will supply the impetus for a recovery. Monetary Stimulus is no panacea to fiscal ineptitude.

Meanwhile the Fed meet this week and are expected to terminate QE Infinity with mission accomplished!? US markets were directionless and await the Fed.

The AUD is battling lower commodity prices and is struggling to break 0,8800 while the NZD is testing 0.7900. The RBNZ is expected to halt the inexplicable interest rate policy raises, this week, which will be a hollow relief for many.

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