Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- September 27, 2012 - Europe's on brink

by Collinson FX on 27 Sep 2012
Image of the Day Day 4 - SB20 European Championships 2012 Alan Hillman & Katie Ashworth/Sportsboat World

Collinson FX market Commentary: September 27 2012

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

Europe again seems to be on the brink, with riots in the streets of Greece and Spanish civil upheaval. The drug addicts are rising up with the threat of reduced or cancellation of their fix. It appears that the socialist nations have built a dependency on the state which has been funded by debt and has now overwhelmed their domestic economies and is about to overwhelm the EC!

The expansion of the Money Supply, through printing more EUROs, has taken the ECB balance sheet beyond ridiculous and destroyed wealth. There is no further option and Super Mario has gone all in! Risk aversion has now tipped the balance and despite QE Infintiy, the Dollar has risen with the EUR dropping to 1.2850 and the GBP 1.6150. The crises in Europe is in a death spiral with Politicians unable to solve the problems due to lack of national support. They need to balance budgets and attack the debt but the citizens have become dependent on the Government who does not generate any income.

Austerity has resulted in civil disobedience which now acts as a deterrent to fiscal action. In the US, New Home Sales disappointed falling 0.3% popping the wave of optimism in the Housing sector. Commodities drifted lower and risk aversion hit the AUD which dropped to 1.0350.

The poorer cousin continues to hold above 0.8200 defying gravity and enjoying relative gains despite the fall in risk appetite. Europe is driving the fear markets are experiencing as confidence in Monetary solutions wain and leaders fail. We need a quantum change politically and this must start with the worlds largest economy!


Collinson FX market Commentary: September 26 2012

ECB President, Draghi, met with German Chancellor, Merkel, today and promoted the ECB Bond Buying Bailout plan as a sucess pointing to the relative stability experienced recently.

The worries still remain as fundamentally all they have achieved is a temporary reprieve in the form of lower short term interest rates. The fundamental crises not only remains but grows with individual nations deficits. Spain remains under pressure with protests and civil upheaval sparked by the introduction of further austerity measures. IMF President advises a write-off of unmanageable Greek debt setting a wonderful blueprint for other trouble member nations. Unsustainable deficits lead to unsustainable debt. Solution:Lend more money and artificially lower rates through monetary intervention to allow sustainability.

Debt continues to rise as deficits remain so write off the debt! Absolute lunacy! In the US, markets drifted lower after some uncomplimentary comments from Philly Fed Chairman Plosser. Plosser advises that QE Infinity will atificially lower short term interest rates and do little to lower long term rates. It will not, therefore, do much to boost growth or employment.

A fail from Plosser does little for the Fed's credibility!.The EUR dropped below 1.2900 with the news although stronger economic data pushed the single currency above the big figure. S&P Home Prices rose for the seventh straight month and Consumer Confidence hit a new high propelled by QE3.

Commodities tread water supported by a weak Dollar but undermined by risk appetite.The AUD held 1.0400 and the KIWI moved to .8240 showing some local support after a slow start to the week. Europe will remain the focus with US economic data driving sideway market direction.

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 - Apr 29 - KIWI's slide continues
The real victim has been the KIWI, which has fallen to 0.6850, while the AUD has slipped below 0.7500. The EUR held below 1.0900, while the GBP pushed to 1.2950, quietly posting big gains in the lead up to the UK General Election. Commodity currencies have lost substantial ground, especially against the cross rates, while the reserve continues to dominate. The real victim has been the KIWI, which has fallen to 0.6850, while the AUD has slipped below 0.7500.
Posted on 29 Apr
Collinson FX Market Commentary - Apr 28 - KIWI remains low
The NZD has plunged to 0.6875, while the AUD has slipped to 0.7470, despite relatively strong CPI data. The huge rally in equities was triggered by the French elections and sustained by the tax cut proposals by the Trump administration. Overnight Treasury Secretary Mnunchen revealed the 'biggest tax cuts in US history'! This policy must be passed in to legislation, which Trump has had limited success, to date.
Posted on 27 Apr
Collinson FX Market Commentary - Apr 27 - KIWI plunges
The NZD has plunged to 0.6875, while the AUD has slipped to 0.7470, despite relatively strong CPI data. The huge rally in equities was triggered by the French elections and sustained by the tax cut proposals by the Trump administration. Overnight Treasury Secretary Mnunchen revealed the 'biggest tax cuts in US history'! This policy must be passed in to legislation, which Trump has had limited success, to date.
Posted on 26 Apr
Collinson FX Market Commentary - Apr 26 - French joy but ANZAC slides
The AUD slipped back to 0.7525, while the KIWI plunged through 0.7000 Markets exploded in reaction to the first round of the French Presidential elections. The French CAC rallied over 4%, with Centrist candidate Macron, leading through to a run-off with LePen. Polls predict an easy win for Macron, who has been endorsed by the traditional left and right wing parties, but it is a two horse race?!
Posted on 25 Apr
Collinson FX Market Commentary - Apr 25 - Two week cruise to victory?
The AUD slipped back to 0.7550, while the KIWI looks to test 0.7000, on the downside Markets exploded in reaction to the first round of the French Presidential elections. The French CAC rallied over 4%, with Centrist candidate Macron, leading through to a run-off with LePen. Polls predict an easy win for Macron, who has been endorsed by the traditional left and right wing parties, but it is a two horse race?!
Posted on 25 Apr
Collinson FX Market Commentary - Apr 22 - Trump's action sparks rally
Markets rallied to close the week with Trump signing executive orders for tax reform and financial deregulation. Markets rallied to close the week with Trump signing executive orders for tax reform and financial deregulation. Tax reform is likely to come next week and financial deregulation is likely to come in the form of repeal of the Dodd/Frank legislation. This will release markets and fuel the rally. France hold the first round of the Presidential elections this weekend with the possibilities ensuri
Posted on 24 Apr
Collinson FX Market Commentary - Apr 21 - NZD struggles
AUD moving above 0.7500, while the NZD is battling to hold 0.7000. The EUR held 1.0700, while the GBP is consolidating the lofty gains posted by the snap-election, as elections dominate markets. Commodities currencies were steady, with the AUD moving above 0.7500, while the NZD is battling to hold 0.7000.
Posted on 20 Apr
Collinson FX Market Commentary - Apr 20 - AUD drops on confidence loss
The rising reserve is testing the 0.7000 number on the NZD, while the AUD fell below 0.7500 European markets are under pressure with the arrival of the French elections. It look like a right-left run-off is the likely result but on the extremes. LePen and a candidate from the left will go through to a final run-off. This will drive markets into a nervous period
Posted on 20 Apr
Collinson FX Market Commentary - Apr 19 - Early election jumps UKP
The reserve softened allowing, the NZD to consolidate above 0.7000, supported by dairy prices. European markets were thrown a curve ball, when UK PM May called for an early election, while the pending French election has the prospect of upending the EU. The snap election in the UK is seen as an opportunity to consolidate and validate the Tory Govenrment leading in to Brexit.
Posted on 19 Apr
Collinson FX Market Commentary - Apr 16 - Trump jawbones USD down
The commodity currencies surged, with the AUD jumping almost a big figure, to 0.7570. The commodity currencies surged, with the AUD jumping almost a big figure, to 0.7570. The KIWI was testing 0.6900, on the downside, but spiked towards 0.7000 with the Trump jawboning. The coming week is full of significant global economic data releases which will impact currencies while Geo-Political developments remain the major driver of any substantial moves.
Posted on 16 Apr