Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- September 4, 2012 - Looking to China

by Collinson FX on 4 Sep 2012
Image of the Day Bosham Classic Boat Revival Jonathan Hoare

Collinson FX market Commentary: September 4, 2012

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

The markets in the US were closed for Labor Day so the focus was on Asia and Europe. Chinese Manufacturing PMI continued to deteriorate falling to 47.6 in a steady downward trend.

Markets remained steady as the prospect grows of Chinese monetary intervention. Growing global economic fallout from weakening conditions are now only supported by Central Bank intervention. Bernanke has indicated a penchant for action if conditions continue to weaken.

In Europe, the ECB meeting is expected to announce a much awaited Bond-Buying program to alleviate funding pressures on Italy and Spain. Questions from the Bundesbank have been supported by the German Economic Minister likening the program to a drug administered to the waiting addict! The EUR remained steady trading 1.2590 and the GBP 1.5900 after some improving Manufacturing data perhaps reflecting some light at the end of the UK tunnel.

The Chinese problems have spread to commodity driven Australia with the AUD slipping to 1.0250. The Commodity price index slipped as terms of trade weaken. Inflation spiked to 2.2% impacted by the Govt's new Carbon Tax and Retail Sales dropped 0.8% surprising analysts who were expecting a gain.

Job Advertisements fell 2.3% tempting the RBA to cut rates at todays meeting.

Most surveyed expect no action although some may be required in the near future.

The KIWI followed back to under 0.8000 with Central Bank intervention being the only positive globally. If the only good news is further money printing markets are in real trouble!

Collinson FX market Commentary: September 3, 2012

Jackson Hole came and went.

The anti-climax was palpable, although the prospect of QE remained with Bernanke continuing to promise an additional fix. The prospect was enough to break the weeks equity losses and sustain a rebound.

The European Bailout rumbled on with the Bond-Buying Bank Bailout set to be announced in the coming week. This will temporarily allow Spain and Italy to issue enough debt at a manageable rate with the ECB funding the issuance either directly or indirectly (allowing Banks to enrich themselves in the process!).

Funding further debt does not address the cause of the problem and that is the endless deficits! Draghi has promised to do 'whatever it takes' but this will not be enough. The EUR rebounded to 1.2580 with the prospect of more US Dollars in circulation.

The new week will be flooded with economic data in Europe and the US highlighted by crucial employment reports. Central bank decisions will also drive sentiment with the BofE, ECB, Bank of Canada, RBA all announcing.

Expectations will be low, except for the ECB, but Draghi has built expectations in the Latin way.

KIWI broke back above 0.8000 and the AUD reached 1.0345.


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- Feb 26- Regulation reduction continues
AUD pulled back to 0.7660, while the NZD slipped back below 0.7200 Commodity currencies took no heart from the softer reserve, with the AUD pulling back to 0.7660, while the NZD slipped back below 0.7200. The coming week is a sea of global economic data releases but will continue to be dominated by the Trump Adminstration. The President will address congress and outline his legislative goals.
Posted on 27 Feb
Collinson FX Market Commentary - Feb 24 - Trump turns down volume
The weaker reserve aided the bounce in the KIWI, which jumped to 0.7225, while the AUD regained 0.7700. The Treasury Secretary, Mnuchin, made observations overnight regarding tax that did unsettle the Dollar. Mnuchin questioned the 'border tax' and pointed out tax cuts, expected before August, would not flow through to the economy until 2018.
Posted on 23 Feb
Collinson FX Market Commentary - Feb 22 - US Dollar resumes rally
The rising reserve has kept the AUD below 0.7700, while the NZD has drifted back to 0.7150. The Dollar resumed the Trump rally, with the EUR falling to 1.0550, while the Yen traded 113.50. Commodities have fared well, although the rising reserve has kept the AUD below 0.7700, while the NZD has drifted back to 0.7150. NZ Dairy Prices were weak and assisted the NZRB's dialogue, in terms of currency, although the story remains the US Dollar.
Posted on 22 Feb
Collinson FX Market Commentary - Feb 21 - Pence steadies Europe
The AUD remained below 0.7700, while the NZD drifted below 0.7200, looking for support from the Dairy Auction. US equities settled in a quiet open to a holiday weekend. The Dollar was also steady, with the EUR trading 1.0600, while the Yen held above 113.00. The AUD remained below 0.7700, while the NZD drifted below 0.7200, looking for support from the Dairy Auction.
Posted on 20 Feb
Collinson FX Market Commentary - Feb 17 - Bullish markets in US
The AUD was softened by the news, slipping below 0.7700, while the NZD jumped to 0.7225 Australian Employment data was mixed, with Unemployment falling to 5.7%, but this was tempered by a fall in full time employment. The AUD was softened by the news, slipping below 0.7700, while the NZD jumped to 0.7225. Markets are very bullish and this is likely to continue, although action must follow rhetoric in the US.
Posted on 17 Feb
Collinson FX Market Commentary - Feb 16 - Markets have a gay day
AUD looking at 0.7700, while the NZD jumped to 0.7200 The market rally continued with gay abandon, while Trump met with BB Netanyahu at the White House, turning his attention to a peace solution in the Middle East. He also found time to meet with Retailers, for the first time, which was welcomed with a strong rally in Retail Sales.
Posted on 16 Feb
Collinson FX Market Commentary - Feb 15 - US touts interest rate rise
The AUD slipped back to 0.7640, while the NZD dipped below 0.7150, also hit by a bullish reserve. Fed President Yellen made her bi-annual appearance in front of congress informing them of expected rate rises during the current year. She cited growth and inflation as the reason for interest rate rises and that it would be wise to address them sooner rather than later.
Posted on 14 Feb
Collinson FX Market Commentary - Feb 11 - Kiwi flounders as AUS surges
The blow dealt by the RBNZ has been sustained, with the currency floundering below 0.7200 The blow dealt by the RBNZ has been sustained, with the currency floundering below 0.7200, while the AUD marches towards 0.7700. This has provoked a sudden and substantial reversal in the cross rate. The coming week sees an avalanche of global economic data releases although it is hard to see Trump not dominating markets.
Posted on 11 Feb
Collinson FX Market Commentary - Feb 10 - NZD collapses on RBNZ stall
The NZD fell from above 0.7300, to trade 0.7175; the AUD remained steady, trading around 0.7625 The RBNZ left rates unchanged, in their latest Monetary statement, shifting the bias from easing to neutral. Many expected a more bullish approach to interest rates, but the Central Bank predicted no action until 2019. This did not gel with reality. This reading of the monetary situation triggered a collapse in the NZD, which fell from above 0.7300, to trade 0.7175!
Posted on 10 Feb
Collinson FX Market Commentary - Feb 9 - All quiet on US front
The Dollar was steady, with the EUR trading below 1.0700, while the Yen holds around 112.00. A quiet night of trade on equity and currency markets with little economic data releases or action on the Trump front. Trump is still immersed in the immigration ban and pushing for his Cabinet approvals in the Senate. You can't keep a good man down for long so we can expect more fireworks to impact markets.
Posted on 9 Feb