Collinson FX Market Commentary- October 17, 2013 - Markets soar
by Collinson FX on 17 Oct 2013
Collinson FX market Commentary: October 17, 2013
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- 18ft International - Day 3, 11 September 2013 © Richard Gladwell www.photosport.co.nz
Equity markets surged as a deal has been done in the US Congress. Republicans caved and the US Government will open until next January and the Debt Ceiling has been extended until February, 2014. The deal is an overwhelming win for the Democrats who now get to carry on spending at record levels destroying the budget and the Dollar.
The Political fall-out will be even greater, with the likely collapse of Republican credibility/support and could see the fall of the House Speaker. A return to 'normal' will now mean a focus on the economy and expectations should not be high. The suspension of the US Government has resulted in a lack of official data which will now resume.
The flood of data will swamp markets and analysts will digest this and will be reflected in the markets.
Currencies have remained steady throughout these dramatic political times with the EUR trading 1.3530 and the GBP 1.5950. Commodities surged and the AUD recovered lost ground to trade 0.9530 with the KIWI breaking back above 0.8400. Equities will breathe a sigh of relief until economic realities hit home.
Collinson FX market Commentary: October 16, 2013
The stalemate continues in this deadly game of chess the two political parties continue to participate in. The House put forward a plan which was vehemently rejected by the Senate leader, Reid.
He continues to work with Republican members of the Senate for a short term debt extension and a temporary re-opening of the Government. Democrats sense a capitulation and a going in for the kill with the Republicans taking the heat in the Polls.
A face saving exit would all the would need but the Democrats intend to destroy the enemy. Trapped their is little choice but capitulation would be political suicide. Markets remain calm with equities giving up the previous days gains and currencies remaining steady.
The EUR traded 1.3515 and the GBP 1.5980 with no official US official data.
The AUD surged above 0.9500 yesterday after positive news from the US and held overnight despite the uncertainty. The NZD has also booked gains with attractive alternative investment prospects for investors disappointed in the USD.
The KIWI traded above 0.8350 but could be vulnerable with a failure in US negotiations. Still all about Washington!
Collinson FX market Commentary: October 15, 2013
Expectations are rising in Washington, that a deal to avoid the debt default, is likely to be done. The Senate leaders have been negotiating, as have a bi-partisan group of Senators, which is likely to result in some sort of solution which will be sent to the Republican House.
All Congressional leaders are scheduled to meet with Obama and Biden at the white house to address the situation. Biden is a known negotiator and may have an influence on his intransigent boss. The prospect of a deal turned equity markets positive after early losses.
There is no major data releases in the US as it is Columbus Day holiday and the Government remains closed for business.
The EUR rose back to 1.3560 and the GBP approached the significant 1.6000 level. Commodities also recovered, boosting associated currencies, with the AUD rising to 0.9460 and the KIWI surging back towards 0.8350. Focus remains Washington.
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