Collinson FX Market Commentary- July 16, 2013 - Wall Street rallies
by Collinson FX on 16 Jul 2013
Collinson FX market Commentary: July 16, 2013
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Elliot 7’s - 2013 Auckland Cup, Day 2 © Richard Gladwell www.photosport.co.nz
Equity rallies continued on Wall Street with Citi leading the Financials by beating earnings expectations.
The Banks must make money given the highly advantageous environment the Fed continues to provide. The Empire State Manufacturing data rose, improving this sector and allaying fears in this critically challenged sector. Retail Sales rose 0.4%, which was not convincing, and missed analysts expectations and should scare many investors as it is the Consumer that drives the US economy.
The EUR held Fridays gains trading 1.3060 and the GBP 1.5100. Chinese GDP fell to 7.5 from 7.7%, well below the heady days of double figure increases. This is the new norm as the regime tries to gain control of growth and manage the expansion of the new global economic super-power. The realigned economy will provide steady demand but has turned the commodity price bubble accounting for a massive correction in associated currencies.
The AUD has fallen a long way in a short time, but has now established a solid floor at 0.9000 which has become a major support level. The currency stabilised overnight just under the 0.9100 after another hit in US trading to close last week.
The KIWI has also touched 0.7800 after again looking to test the major support level of 0.7700. These currencies remain vulnerable to any hits taken in commodity demand from China who, in turn, remain heavily exposed to Europe and the US!
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