Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- October 31, 2013 - Stimulus stays

by Collinson FX on 31 Oct 2013
Go - Start of Coastal Classic 2013, Waitemata Harbour, October 25, 2013 © Richard Gladwell www.richardgladwell.com

Collinson FX market Commentary: October 31, 2013

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

The Fed observed 'improved economic activity' but maintained the unprecedented stimulus! This did not instill confidence in markets. Housing is improving, but not to the extent the Federal Reserve requires, to cut the extra-ordinary injections of liquidity.

The weakness of the economy is obvious to most, but bad news remains good. With record low interest rates investment in housing should be spiralling upwards and out of control, as it is in pockets of economic freedom (i.e.NZ and parts of Australia), but it is not. This would require confidence in investment, which does not exist! The Dollar continues to recover with the EUR trading 1.3725 and the GBP slipping back to 1.6020. Bonds remain static, so there is no sign of panic yet, but this is where the warning signs will come from.

Commodities remain steady but the associated currencies continue to decline, with the AUD dropping to 0.9470 and the KIWI 0.8230 ahead of RBNZ statement at 9.00 am NZT this morning. Risk is the issue, with these currencies and appetite on the wane. No surprises from the Fed but the hard-line Monetary Policy is an indictment of the parlous state of the US economy. This has created a balloon in equities that must pop rather than deflate.

Currencies will not be immune and the weakness in the Dollar will continue until the white hot printing presses in the US are controlled.


Collinson FX market Commentary: October 30, 2013
The days of economic fundamentals driving the markets are long gone, now the Fed has introduced their new economic regime of Monetary Expansionism. The unprecedented period of duplicity by the Fed has created a new monetary utopia and damn the consequences! This is the new reality....'good news is good news and bad news is good news!'.

The Fed meets today with the outcome announced tonight, with the likely full extension of QE infinity with the possibility of an expansion. The equity bubble has continued to stretch, with no prospect of a let up in the flood of liquidity. The only threat is a reality prick which may cause panic in equity, currency and commodity markets. The trigger for this will be reflected in the Bond market so any spike in US 10 year bonds will be the canary in the mine.

Equities again surged with the news that Consumer Confidence fell by the most in 2 years and Retail Sales contracting 0.1%!? S&P Home Prices rose 0.93% to 12.83%, some good news to a faltering economy.

The Dollar rebounded, with the EUR slipping to 1.3750 and the GBP 1.6030. Risk currencies reflected some of nervous reality, with the AUD dropping to 0.945 and the KIWI drifting to 0.8250. All eyes remain on the Fed's announcement tonight.


Collinson FX market Commentary: October 29, 2013

The Fed meets for two days tonight and the outcome will be keenly awaited with Central Bank stimulus the main driver of equity bubbles.

Some have suggested that the weak economic data may prevent the introduction of Fed tapering but now a few are suggested enhanced monetary stimulus!

The 'all in' monetary policy would also be attractive to the doves of which nominee, Yellen, is certainly one. US Industrial and Manufacturing Production was mixed and the Dallas Fed Activity reported a decline in activity. Exisiting Home Sales also declined, by a further 5.6%,providing further evidence of a softness in the housing market despite record low interest rates.

The Dollar stabilised momentarily, with the EUR trading below 1.3800 and the GBP 1.6150. Risk currencies were steady with the AUD 0.9550 and the KIWI trading just below 0.8300. All eyes will be on the Fed and other Central bank activity, including the mighty RBNZ, which may offer a surprise!


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

Gladwell's Line - Does the America's Cup really need a Star Chamber?
The first meeting of the three-man America's Cup Arbitration Panel is believed to have taken place in London The first meeting of the three-man America's Cup Arbitration Panel is believed to have taken place in London in the past week or so. Officially the date hasn't been publicly announced. The venue hasn't been publicly named, and the parties have appeared before a Panel that is publicly nameless.
Posted on 23 Jul
America's Cup - Glenn Ashby on Emirates Team NZ's road to Bermuda
Part 2 of the interview with Emirates Team NZ skipper Glenn Ashby. In this part of the interview we look at what is going to happen once Emirates Team NZ get their 'AC49.5' sailing in Auckland, and how the campaign may shape up before they leave for Bermuda. Ashby wouldn’t be drawn on whether Team New Zealand had started their AC50 build, with July being the usual start of what is usually a five-month build and commissioning period for an end of December launch.
Posted on 10 Jul
America's Cup - Glenn Ashby on Emirates Team NZ's new AC49.5
Sail-World talks with Emirates Team NZ skipper, Glenn Ashby on what is different about the team's new test boat Just under 11 months out from the 35th America’s Cup, Team New Zealand does not seem to be in its customary place at the front of the starting grid to be the first to launch their Challenger, or are they? Although they will be one of the last of the six teams to launch an AC45 Surrogate, Emirates Team New Zealand may have stolen a march with a boat that is as close as you can get to an AC50.
Posted on 9 Jul
Gladwell's Line - Emirates Team NZ launches shadow AC50
Emirates Team NZ took a late but significant step along the road to the 35th America's Cup, with the launch of their AC4 Emirates Team NZ took a late but significant step along the road to the 35th America's Cup, with the launch of their AC45S - as the test boats are called in the Protocol which governs the 2017 event. The bloated Protocol, which now runs to 83 pages of legalese, is restrictive on the size of boat that can be built as a test platform but doesn't restrict the number that can be built.
Posted on 22 Jun
Platino recovery - Family confirms that tug has made rendezvous
Reports in social media say a salvage tug has made a rendezvous with the Platino earlier than expected. Reports in social media by family and friends of Nick Saull, the crew member killed during a catastrophic incident abroad the 66ft yacht Platino say the salvage tug which left on Tuesday night has made the rendezvous earlier than expected. The Facebook report says the tug, Sea Pelican, arrived on Friday morning, the weather in the area has eased and with a more favorable outlook.
Posted on 16 Jun
Rio 2016 - Double Olympic medallist on the delights of Guanabara Bay
Olympic Gold and Bronze medallist Bruce Kendall updates on the 2016 Olympic venue at Guanabara Bay. Olympic Gold and Bronze medallist, and now a windsurfer coach, Bruce Kendall has made several trips to the 2016 Olympic venue at Guanabara Bay. He updates on the pollution issue which is clearly not going to be resolved in a couple of months, and also shares his views on the venue from a sailing competition perspective.
Posted on 14 Jun
America's Cup - Artemis win Chicago as Team Japan wins two races
Louis Vuitton America's Cup World Series got three races away on Super Sunday. After losing the first official day of racing due to light winds and the non-arrival of the onshore breeze, Louis Vuitton America's Cup World Series got three races away on Super Sunday. From a racing perspective this was probably the best day of racing yet in the series which counts for points in the Qualifying Series of the America's Cup in 11 months time.
Posted on 12 Jun
America's Cup - Emirates TNZ NZ and Oracle capsize in Chicago Practice
Emirates Team New Zealand and Oracle Team USA capsized in Practice Racing at the Louis Vuitton ACWS Chicago There was action aplenty on Practice Day at Louis Vuitton America's Cup World Series Chicago, after Emirates Team New Zealand capsized in their match with Oracle Team USA, and then Oracle Team USA capsized later in the day. Team NZ's skipper skipper Glenn Ashby performed some impressive acrobatics ejecting from the AC45 capsize, without injury.
Posted on 11 Jun
America's Cup - Changes proposed to control future Cup options
Changes are being mooted to put the America's Cup on a longer-term footing according to the Daily Telegraph (UK) News that changes are being mooted to put the America's Cup on a longer-term footing is being floated in the Daily Telegraph (UK) by the British Challenger, Land Rover BAR. According to the Telegraph, some of the teams in the 2017 America's Cup are keen to lock-in parameters which would bind successive holders of the a style and frequency for the next America's Cup Match.
Posted on 8 Jun
America's Cup - AC50 construction uncovered - Part 2 - Wings and Costs
Second part of a two-part series looking at the AC50 construction progress at Core Builders Composites Second part of a two-part series looking at the construction progress at Core Builders Composites, and features of the AC50 class which will be used in the 35th America's Cup in Bermuda. Tim Smyth takes us on a tour of the CBC facility in Warkworth, and hour's drive north of Auckland. Where several AC50's, components and wingsails are under construction or have already been shipped to the teams.
Posted on 5 Jun