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.photosport.co.nz

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

Rio 2016 - America's Cup champ says Paralympic racing is closest ever
Twice America’s Cup champion, Rick Dodson is extremely impressed with the standard of racing in the three man Sonar Twice America’s Cup champion, Rick Dodson is extremely impressed with the standard of racing in the three man Sonar keelboat class at the 2016 Paralympics in Rio de Janeiro. The regatta is being held in Guanabara Bay on three of the courses used for the Olympic Sailing Regatta in August.
Posted on 13 Sep
Maxi Yacht Rolex Cup 2016 - Day 2 Images by Crosbie Lorimer
The Mistral is in and howling at Porto Cervo! After a brief lull to permit racing on Day 2 after the Day 1 cancellation, The Mistral is in and howling at Porto Cervo! After a brief lull to permit racing on Day 2 after the Day 1 cancellation, we have a second 'Lay Day' on Wednesday with racing again cancelled due to high wind speeds and a large seaway. The conditions were near enough perfect on Day 2 however, with 17-18 knots and a short sea, the breeze dropping later in the day.
Posted on 7 Sep
America's Cup - Emirates Team NZ train late on the Waitemata Harbour
Emirates Team NZ were out for a training session that ran into the early Thursday evening. Emirates Team NZ were out for a training session that ran into the early Thursday evening. The team were sailing their recently launched AC45 Surrogate test boat which features an articulated rudder gantry - taking the AC45 close to the geometry of the AC50 to be used in the 2017 America's Cup.
Posted on 1 Sep
Dateline Rio - Sailing Olympics review - as good as it gets?
The Rio Sailing Olympics was widely judged to have been the best of recent times. The Rio Sailing Olympics was widely judged to have been the best of recent times. The weather was better than Weymouth and Qingdao, the courses more varied, but from a working media perspective, it was the people running the Rio regatta who really made the difference.
Posted on 26 Aug
Rio 2016 - Plain speaking by triple-medalist on Olympic sailing moves
Triple Olympic medalist, Santiago Lange has been on the sharp end of changes made to Olympic classes and formats Santiago Lange, a six-time Olympian and Bronze medallist in the 2004 and 2008 Olympics, won his third medal – Gold sailing in the Nacra 17 class. With that length of experience at an Olympic level, having sailed the Laser, Tornado and now Nacra 17 classes his comments on the future shape of the Olympic regatta was one of the highlights of the Medallists Media Conferences.
Posted on 25 Aug
Rio 2016 - Images of the penultimate race in the Finns - Scott wins
Sail-World's Richard Gladwell was on the water for the final race of the Qualifying Series of the Mens Finn Sail-World's Richard Gladwell was on the water for the final race of the Qualifying Series of the Mens Finn, in what potentially could have been Giles Scott's (GBR) Gold medal winning race. In the end, the current world champion won in style.
Posted on 15 Aug
Rio 2016 - Images from the Mens RS:X Medal Race
Sail-World's NZ Editor, Richard Gladwell, was on the water at the Medal Race for the RS:X class Sail-World's NZ Editor, Richard Gladwell, was on the water at the Medal Race for the RS:X class won before the race by Dorian van Rijsselberghe (NED) without needing points from the Medal Race. Nick Dempsey (GBR) was second on a similar basis.
Posted on 15 Aug
Rio 2016 - Sailors talk of Life at the Extreme on the Atlantic Ocean
Certainly the Volvo Ocean Race catchcry of Life at the Extreme is not a phrase associated with the Sailing Olympics. The 470 crews were suffering the mixed emotions of survival of an extreme test by nature, the cold, and for some elation at their placings, after Thursday's battle for survival. In conditions that looked more out of the Volvo Ocean Race, than an Olympic sailing regatta, crews battled 20kt plus winds and Atlantic Ocean rollers that towered up to four metres.
Posted on 13 Aug
Rio Olympics - Fourth gallery of images the fearsome Niteroi course
Fourth image gallery from racing on Day 4 in the Mens and Womens 470 class on the Niteroi course in the Atlantic Ocean Fourth image gallery from racing on Day 4 in the Mens and Womens 470 class on the Niteroi course in the Atlantic Ocean - sailing in 3-4 metre swells and 20kt plus winds. believe it or not the sea conditions were worse inshore as the fleet encountered the backwashed Atlantic rollers
Posted on 12 Aug
Rio 2016 - Third image gallery of 470's braving the Atlantic Ocean
Third image gallery from racing on Day 4 in the Mens and Womens 470 class on the Niteroi course in the Atlantic Ocean Third image gallery from racing on Day 4 in the Mens and Womens 470 class on the Niteroi course in the Atlantic Ocean - sailing in 3-4 metre swells and 20kt plus winds
Posted on 12 Aug