Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- October 25, 2012 - Markets steady

by Collinson FX on 25 Oct 2012
Image of the Day Ran Tan in strife after the start of the 2012 Coastal Classic © Richard Gladwell www.photosport.co.nz

Collinson FX market Commentary: October 25, 2012

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

Markets remain steady awaiting major economic or political events this side of the Presidential election. European economic data continues to disappoint with the PMI falling to three year lows, level with the Post-GFC Recession.

Greece has announced a moratorium on austerity caveats enabling them to continue to blow-out any and all Bailout targets and still receive funding from the EC. The decision must be based on the premise that anything and all must and will be done to prevent the first shoe to drop!

The sheer desperation is astounding and the costs to the EC undisclosed. In Asia the Chinese PMI contracted for the 12th straight month still operating below 50. The AUD contradicted other risk aversion with a strong move back to 1.0350. This was due to a surprising blow-out in inflation data. The CPI rose 1.4% for the quarter and 2.0% for the year.

This is due, in the main, to the flow on effects of the Governments Carbon Tax. The Carbon Tax effects major Carbon producers but necessarily raises the price of electricity across the board. Electricity and Gas have risen over 15% for the quarter, which is the biggest rise ever recorded! It is the flow through of these cost that are impacting the economy as this is a universally pervasive tax. This continued inflationary pressures have increased the cost of living to a struggling citizenship and terminally affected Manufacturing relying on electricity and gas. Ironically, Government reports an increase in future carbon emissions and with rising global coal exports, rising Global Carbon emissions! A planned hatched in Academic Heaven and endorsed by naive liberal acolytes.

In the US, New Home Sales rose 5.7% although Weekly Mortgage Applications fell 12%. The Feds two day meeting ended with no interest rate change and an endorsement of Operation Twist and QE Infinity. Growth was moderate with record low interest rates to continue to mid-2015. Nothing new from the Fed with rumours flying of the impending resignation of Bernanke whatever the election result.

The EUR continued to trade below 1.3000 although the GBP rallied to 1.6030. EU Debt crises developments and the Presidential elections will dominate markets for the next two weeks although many will watch the RBNZ and their penchant for positive pro-active policy!?


Collinson FX market Commentary: October 24, 2012

Equity markets plunged overnight with growing fears from Europe and disappointing corporate earnings from the US. In Europe, S&P downgraded some regional Governments in Spain while news that the economy is contracting at a greater pace than expected.

The third quarter GDP contracted at 1.7% after austerity had hit the second quarter by 1.3%! The enormous collapse in growth as a direct result of austerity measures will push panic buttons across Europe. The medicine prescribed has the collateral damage that will impact these nations socially with citizens rioting the hardship. This should serve as a stern warning to the US and the track they have been on.

It should drive voters away from the failed policies of the left with the spend and borrow mentality fueled by corrupted Keynsian economics. The EUR dropped below 1.3000 and the GBP under 1.6000 as confidence collapsed. The Reserve Bank of Canada left rates unchanged as the Fed met for their two day meeting. Expectations are for no further action reliant on QE Infinity!

The AUD fell back to 1.0250 and the KIWI to 0.8115 with risk appetite hemorrhaging with Australian Leading Index failing 0.8%.

The digestion of the Australian Mid-Year Budget update is seen as the 'shuffling of the deck chairs on board the Titanic' to many commentators!


Collinson FX market Commentary: October 22, 2012

Markets continued to retreat after Fridays big falls. In Europe, Spanish regional elections have done little to impact the EUR which traded 1.0350 and the GBP 1.6000.

Eurozone Debt to GDP rose to 87.3% which is closing fast upon the magical 100% which has lead to many individual national crises. In the US, markets were lower after further weak Corporate earnings and confidence on the slide. The focus is on the fast approaching Presidential Elections and the final Presidential debate overnight.

In Asia the mood was set with deteriorating Trade data from Japan with Exports declining over 10% and Imports on the rise.

In Australia, the Government has released a mid-year Budget update early to avoid inclusion of declining revenues form an economy impacting by falling global demand. The AUD held 1.0300 after the announcement, although does look vulnerable to the Global instability. The KIWI continues to trade around the 0.8150 levels.

Focus today will be political in Europe and especially the US!


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 - Dec 3/4 - European mayhem
AUD back up to 0.7445, while the NZD breached 0.7100. The EU is descending in to mayhem and France and Germany may seek to salvage what they can and retreat from goals of globalisation. Oil continues to bank gains, post-OPEC, leading a commodity revival. This has been enhanced by the softening reserve, with the AUD back up to 0.7445, while the NZD breached 0.7100. Onwards and upwards for markets and the Dollar remains king!
Posted today at 10:44 am
Collinson FX Market Commentary - Dec 2 - The (US) Dollar remains king!
The AUD regaining 0.7400, while the KIWI stalled around 0.7050. The Dollar was steady, but remains bid, with the EUR trading 1.0625 and the Yen 114.40! The GBP has fared well, moving back to 1.2600, as a kindred spirit to a Trump USA. The commodity currencies have solidified, with the AUD regaining 0.7400, while the KIWI stalled around 0.7050. Onwards and upwards for markets and the Dollar remains king!
Posted on 1 Dec
Collinson FX Market Commentary - Dec 1 - OPEC defies pundits
The AUD lost a big figure, to trade below 0.7400, while the NZD slipped to 0.7075. OPEC have defied all the sceptics and done a deal! The Cartel have agreed to cut Oil production by 4.5%, allowing Oil prices to surge towards $50/barrel, feeding Energy companies. This is huge news in the energy space but solidarity will have to be seen to be believed!?
Posted on 1 Dec
Collinson FX Market Commentary - Nov 30 - Oil drops to $45/barrel
NZD breaks 0.7100, while the AUD looks towards 0.7500 OPEC confidence is low, with a diverse group not expected to agree to any supply restrictions, pushing Oil back to $45/barrel. The USD has settled into a lull, which has boosted resurgent commodity prices, as growth drives demand. The associated currencies have been beneficiaries, with the NZD breaking 0.7100, while the AUD looks towards 0.7500.
Posted on 30 Nov
Collinson FX Market Commentary - Nov 29 - Iran undermines oil price
The KIWI has spiked back to 0.7050, while the AUD has pushed to 0.7460 Oil prices are being watched closely, with OPEC meeting this week, all keenly awaiting the outcome. Iran has re-entered the market and this has undermined any supply caps previously agreed.
Posted on 29 Nov
Collinson FX Market Commentary - Nov 26/27 - Markets back in sync
The AUD closed the week at 0.7430, while the NZD broke strongly above 0.7000, driven by Dollar behaviour. Markets are now back in sync, with good economic news, driving positive reactions in demand for equities and commodities. Post-GFC markets have been upside down, with negative economic data driving equities up, due to Central Bank interventionist monetary policy.
Posted on 28 Nov
Collinson FX Market Commentary - Nov 25 - KIWI drops below 70c
The AUD has attempted to hold 0.7400, while the NZD has slipped below 0.7000 The associated currencies have not responded accordingly, due to reserve strength, which should flow through to improved trade with rising returns from both commodity prices and softer currencies. The AUD has attempted to hold 0.7400, while the NZD has slipped below 0.7000, with local trade data released in local markets an influence. Japanese CPI data, will reflect growth, impacting Asian trade.
Posted on 25 Nov
Collinson FX Market Commentary - Nov 24 - US surges as EUR stagnates
The NZD is now testing the big, big figure of 0.7000, on the downside, while the AUD slipped below 0.7400. US Markets continued to benefit the Trump surge, with equities hitting record levels, while the Dollar continued the bull run. The massive spike in confidence has fed risk appetite and prompted markets to flourish going in to the long Thanksgiving weekend.
Posted on 24 Nov
Collinson FX Market Commentary - Nov 23 - Surfing the Trump Hump
The AUD attempts to regain 0.7400, while the NZD consolidates above 0.7000 Equity markets continued to pile on the runs, exploring record new territory, riding the 'Trump bump'! Economic data release was slow in the US, in a shortened holiday week, allowing post-election trends to continue. The Dollar consolidated after some profit taking
Posted on 23 Nov
Collinson FX Market Commentary - Nov 22 - KIWI and AUD bounce back
NZD bounces back to 0.7050, while the AUD hit 0.7350 The GBP also received a welcome boost, jumping back to 1.1250, while the Yen hit 111.15. Equities charged north, to record levels, with the surge in renewed confidence. Markets are eating up the prospect of the new Trump regime! (S-W: US President-elect Trump has just announced that he will pull USA out of the TPP agreement on his first day of office along with other measures.)
Posted on 21 Nov