Collinson FX Market Commentary- November 7, 2013 - Markets surge
by Collinson FX on 7 Nov 2013
Collinson FX market Commentary: November 7, 2013
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A long tiring trip ahead - Start of Coastal Classic 2013, Waitemata Harbour, October 25, 2013 Richard Gladwell www.photosport.co.nz
Equity markets surged towards record highs after Fed officials hinted that economic weakness warranted continued monetary stimulus. Growth (GDP) and Employment numbers, to be released, will determine short term direction of equities, currencies and commodities.
The renewed commitment to QE Infinity, further depleted the value in the Dollar, with the EUR back above 1.3500 and the GBP approaching 1.6100. Commodity currencies received a boost after initial domestic data gave impetus. NZ
Unemployment dropped to 6.2%, better than expected, pushing the NZD towards 0.8400. The Australian trade numbers improved and a raft of taxes were dismissed by the new Government giving the AUD reason to break back above 0.9500. Markets now await US growth and employment data to determine the extent of monetary expansionism.
The Challenger Jobs Survey, reported that cuts were on the rise, which does not bode well for anticipated releases.
Collinson FX market Commentary: November 6, 2013
Markets were static overnight awaiting important economic data out of the US. GDP data will reflect the anemic growth America is suffering under the Democratic regime and Employment will be watched closely.
The impact of a growing Government is a slowing economy as the public sector drains important investment capital. The Dollar remains weak, trading at 1.3470 versus the EUR and 1.6040 against the GBP. EU growth and Employment were further downgraded but the currencies rose reflecting the destabilisation effect of QE Infinity.
The Fed continue to undermine the US and Global monetary stability with the footloose policy and explosive liquidity. Bonds remain steady but this will continue to be the warning signal. The RBA left rates unchanged, opting to resist the temptation to follow the Fed's lead and hold the status quo.
The AUD traded just below 0.9500, as the nation were focused on the 'Great Race', rather than the intricacies of monetary policy. The KIWI approached 0.8300 but remains vulnerable to any risk aversion trade.
Collinson FX market Commentary: November 5, 2013
Equity markets closed last week strongly and have high expectations going into a strong new week of economic data releases.
Close attention will be paid to US Employment reports and GDP growth. Expectations are not high for either, with the last quarter showing no signs of a break out in the economic recovery. Analysts expect growth to contract to around 2% from 2.5% and employment to remain steady at best.
Low expectations may result in a rally in equities if the data releases are tepid. US Factory Orders rose 1.7%, slightly below expectations, but well above last months fall. The Fed will continue to pump $85 Billion, every month into the system, supporting the bubble in equities. The Dollar was steady, but with the destructive campaign the Fed has been waging, should be on the decline. The EUR traded 1.3500 and the GBP 1.5950 reflecting the weakness in the Eurozone rather than any inherent strength in the reserve currency.
Australian Retail Sales jumped 0.8%,although house prices drifted lower and job ads declined for the month in the lead up to the RBA meeting on Melbourne Cup Day. A history of cuts on Melbourne Cup Day may lead to cuts in the official rate but Ozzies will be more concerned about the outcome of the 'Great Race!' The AUD held up prior to the Central Bank meeting, trading around 0.9500 and the KIWI 0.8260.
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