Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- September 5, 2012 - Slow start in US

by Collinson FX on 5 Sep 2012
Image of the Day Panerai MOY Classic Yacht Regatta George Bekris © http://www.georgebekris.com

Collinson FX market Commentary: September 5 2012

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

US markets began trade for September after the long weekend on a negative note.

Manufacturing data dissappointed with the ISM Manufacturing contracting at its greatest rate in three years. The ISM dropped below the static rate of 50, which was expected, to 49.6. On top of this construction spending hit a new year low shrinking 0.9%. Many leading analysts are now expecting a substantial correction in equities over the next two months reversing recent gains.

The markets have almost reached pre-GFC levels without any substantial fundamental economic recovery. The stabilisation has been bed-rocked by Central Bank monetary intervention which is necessarily temporary with substantial long-term consequences.

In Europe Moody's has moved the EU zone to a 'negative outlook' and warned of downgrades to the main players, and previously sound members, of Germany, Netherlands and France. Expectations are high for the ECB meeting adding liquidity through an interest rate cut and the Bond-Buying program.

There is no unanimity on the Bond program or the mechanism for implementation. Germany is under huge pressure to bend from fellow members and the Obama regime who fear an implosion prior to November elections. The EUR traded below 1.2600 after early gains subsided as risk appetite fades.

The growing discontent has spread to commodity currencies with the AUD trading 1.0220 and the KIWI 0.7940.

The AUD remains under pressure with local economic data turning bad and Govt revenues contracting impacting the budget. The Current Account improved, but for the wrong reasons. Imports fell at a greater pace than exports reflecting the slump in consumer demand locally and global demand for exports. Markets will be focused on the ECB meeting and the all important Jobs reports in the US.


Collinson FX market Commentary: September 4, 2012

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 today's 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 - Jan 19 - UKP surges on Brexit news
The AUD maintained 0.7500, while the NZD drifted back towards 0.7150, shy of the important technical level of 0.7200. UK PM May quelled many critics with her outline of Brexit and provided some plan for the future. Her vision of the return to a global power in trade was appreciated by markets, with the GBP surging to 1.2300, while overnight employment data remained strong.
Posted on 19 Jan
Collinson FX Market Commentary - Jan 18 - Brits opt for Free Trade
AUD trading 0.7540, while the NZD moves towards the important technical level of 0.7200. The Dollar continued to drift, as the GBP surged to 1.2400, while the EUR pushed towards 1.0700. Commodity currencies continued to prosper the slide in the reserve, with the AUD trading 0.7540, while the NZD moves towards the important technical level of 0.7200. The inauguration on Friday is the market focus
Posted on 18 Jan
Collinson FX Market Commentary - Jan 17 - Hard line on Brexit from May
The AUD drifted back to 0.7470, while the NZD held 0.7100, with all currencies being vulnerable to US Dollar swings. The Trump inauguration, on Friday, has also been the major consideration of markets this week. Doubts have surfaced about global trade and predatory industry/corporate tactics driving nervous speculation. The AUD drifted back to 0.7470, while the NZD held 0.7100, with all currencies being vulnerable to US Dollar swings.
Posted on 17 Jan
Collinson FX Market Commentary - Jan 16 - Market jitters over US moves
NZ Consumer Confidence was flat, lending little to a buoyant currency, which held 0.7100. Markets remain in a flux ahead of this week's US Inauguration with high expectations and uncertainties. The Dollar settled, with the EUR trading 1.0640, while the Yen held 114.00. NZ Consumer Confidence was flat, lending little to a buoyant currency, which held 0.7100.
Posted on 16 Jan
Collinson FX Market Commentary - Jan 13 - Trump can't save dollar
The AUD continued to rally strongly, pushing toward 0.7500, while the NZD set to break out targets at above 0.7200 The markets reversal began during the Trump press conference the previous day and continued as analysts digested the repercussions. The 'Trump effect' has been dented as a wider discussion ensues. Trumps promises of lower taxes, fiscal stimulus and deregulation have been roundly welcomed and boosted the equity markets and the Dollar.
Posted on 13 Jan
Collinson FX Market Commentary - Jan 12 - Late reversal for USD
A dramatic reversal in the Dollar has seen the AUD surge to 0.7470, while the NZD broke strongly above 0.7000! The focus remains on the US and the incoming administration. Update in late market trade in the US. A dramatic reversal in the Dollar has seen the AUD surge to 0.7470, while the NZD broke strongly above 0.7000!
Posted on 12 Jan
Collinson FX Market Commentary - Jan 11 - US Confidence surges
The AUD traded up to 0.7350, while the NZD slipped back below 0.7000, impacting the cross rate. Australian Consumer Confidence also surged, pushing to 120.1 from 113.40, which has influenced the local currency. The AUD traded up to 0.7350, while the NZD slipped back below 0.7000, impacting the cross rate. Markets remain focused on the incoming US administration while economic data drives daily direction.
Posted on 11 Jan
Collinson FX Market Commentary - Jan 10 - Australia moves ahead
The AUD reflected this, pushing back to 0.7350, while the NZD regained 0.7000. Australian economic data was positive, with construction rebounding, while Building Approvals jumped. The AUD reflected this, pushing back to 0.7350, while the NZD regained 0.7000. Economic data will drive markets in the lead up to the inauguration of Trump!
Posted on 10 Jan
Collinson FX Market Commentary - Jan 7 - US markets and dollar rebound
The Dollar also resumed upward momentum, with the EUR slipping to 1.0540, while the Yen retreated to 117.00. Non Farm Payrolls added 156,000 jobs versus an expected 204,000, while the Employment number crept up to 4.7%, although wage growth was positive. The Dollar also resumed upward momentum, with the EUR slipping to 1.0540, while the Yen retreated to 117.00. The Trump dynasty fast approaches and expectations are high.
Posted on 9 Jan
Collinson FX Market Commentary - Jan 6 - US turns negative corner
AUD jumping to 0.7330, while the NZD spiked above the big figure of 0.7000 These employment reports may have cast some uncertainty on markets, as equities fell and the Dollar retreated, with the first negative moves in the US this year. The EUR jumped towards 1.0600, while the Yen moved to 115.00, underlining the Dollar weakness.
Posted on 6 Jan