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Collinson FX Market Commentary- March 28, 2014- Speculation push

by Collinson FX on 28 Mar 2014
Blair Tuke (NZL) (to windward) and Glenn Ashby (AUS)A-class catamaran World Championships, Day 3, Takapuna February 13, 2014 © Richard Gladwell

Collinson FX market Commentary: March 28, 2014!Click_here to find out how to get CollinsonFX's free iPhone app

Equity markets are treading water with Russian troops massing on the Eastern borders of the Ukraine.

The lines have begun to be drawn and clearly Putin does not expect to allow his sphere of influence to be overwhelmed by the EC and the West.US GDP came in at 2.6% for the fourth quarter, slightly beating expectations, which indicated further signs of improvement. Pending Home Sales contracted for another month, dropping 10.2%, which did reflect on a weak housing sector.

The EUR dipped back to 1.3750 and the GBP 1.6615. Speculation was rife that the RBNZ would continue to raise interest rates and this pushed the KIWI toward highs, trading around 0.8675 with the AUD rallying to 0.9250.

Confidence continues to rise in the commodity currency world, with growing interest rate differentials, providing attractive capital investment prospects.

Collinson FX market Commentary: March 27, 2014
Equity markets slipped lower overnight, as Obama tours Europe warning Europeans to act strongly against Russian actions in the Ukraine.There is a lot of pressure on the West to stand up to Putin but their hands are tied, militarily,and economic sanctions would be an act of self-harm.

Speculation surrounding the Fed's tapering program was again tested as St Louis Fed President, Bullard, refused to name a date the QE stimulus would come to an end. The EUR moved back to 1.3780 and the GBP to 1.6550. Durable Goods Orders in the US rose, boosting confidence, although this failed to harm the negative impact of Geo-Political developments in Europe.

The AUD has undergone a renaissance recently with domestic economic data on the improve and the expected resurgent Dollar not eventuating. A break above 0.9200 has seen a stern test of the downward trend-line and looks likely to continue unless the Fed support a resurgent Big Dollar. The KIWI rallied to just under 0.8600, having a good look at Exports and Imports, with today's release of trade data. Short term currencies moves can be driven by local economic data and fundamentals matter long term but Geo-Political events and the Fed's Monetary Policy overwhelm these drivers.

Collinson FX market Commentary: March 26, 2014

A lull in developments in the Ukraine has led to a recovery in Equities reinforced by a rise in US Consumer Confidence. There were no new advancements in the Crimean sphere of activity with consolidation allowing some breathing space. US Consumer Confidence jumped to 82.3, from 78.3, perhaps signalling a spring rally.

The EUR was flat, trading around 1.3850, with the GBP 1.6530. Commodities continued to climb and confidence returned to associated currencies as the AUD rose to 0.9150 and the KIWI to 0.8560.

Risk appetite has returned, as the new status quo is embedded across Europe, allowing markets to follow trends. Domestic economic activity has talked a back seat recently but further US Housing Data and GDP growth numbers may have a impact on daily markets. The Geo-Political situation in Europe will impact markets as a new world order emerges in Europe.

Collinson FX market Commentary: March 25, 2014
Equities opened the new week lower with Europe simmering and economic conditions globally weaker. China Flash Manufacturing PMI revealed a slower manufacturing sector in the worlds factory. European Manufacturing PMI was lower in Germany and the EU, with Manufacturing and Services both falling, although France bucked the trend.

The Chicago National Activity Index improved, but remains slow, with the emergence from a nasty winter. This week will focus on US GDP growth and Housing data to provide domestic drivers to equities and currencies. The lack of confidence has lead to a weaker USD as the EUR jumped to 1.3860 and the GBP 1.6520. Risk sentiment has improved with Russia consolidating the Crimea and the West talking a lot.

Commodity currencies thrive on improved risk sentiment and the AUD again broke above 0.9100 and the KIWI 0.8540 in overnight market. Economic data from the US and Geo-Political developments from Europe will again dominate markets for the week

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