sail-world.com
 
 
News Home Cruising Photo Gallery Video Gallery
Sail-World.com : Collinson FX Market Commentary: October 5, 2012 - Bond-buying
Collinson FX Market Commentary: October 5, 2012 - Bond-buying

' Image of the Day Cannes, France, 25 September 2012 - Panerai Classic Yacht Challenge - Regates Royales de Cannes 2012'    Guido Cantini    Click Here to view large photo

Collinson FX market Commentary: October 5, 2012

Click here to find out how to get CollinsonFX's free iPhone app

Central Bank commentary added some support to recent market rallies with 'Super Mario' endorsing the recently announced Bond-buying program. He announced the ECB's readiness to embark on the Bond-Buying program at the request of needy member nations.

The term Jaw-boning seems to have worked nicely with the ECB not having to act at all and the commitment being enough to sway market sentiment. Strangely, they have only committed to underwriting debt to enable members to afford maintenance of ever-growing debt. They have a plethora of austerity measures which have been endorsed and committed to. Unfortunately the deficits roll on adding to overwhelming debt.

The lack of growth has multiplied the problem as recession crushes hope and growing public expenditure to support the social safety net over-runs revenues which are contracting. Equities rallied, despite fundamentals, and the EUR took advantage rising to 1.3015 and the GBP 1.6185. The US found heart in European developments and equities rallied ignoring weaker economic data.

Planned layoffs increased, as revealed by the Challenger Jobs report. Weekly Jobless Claims rose for the week and Factory Orders fell 5.2%. The great redeemer, in the form of Ben Bernanke, saved the day with the revelation of almost unanimity in support of QE Infinity. The dissenter may be in the majority of the real world, in terms of effect.

Commodities rallied giving support to the recently harpooned AUD. The reduced yields had cut the AUD to below 1.0200 but a rally in risk appetite had stabilised recent falls.

The KIWI regained the 0.8200 level and continues to thrive as a target until the Reserve Bank remove the incentive with interest rate differentials. Non-Farm Payroll will drive the close of the week and the stunning win by Romney in the Presidential debate will give heart to markets.

China Team dives in the first race of the America’s Cup World Series San Francisco 2012 october - Match Racing Qualifiers -  Gilles Martin-Raget: AmericasCup©   Click Here to view large photo


Collinson FX market Commentary: October 4, 2012

Global economic conditions continue to deteriorate with the Chinese PMI falling from 56.3 to 53.7 and the EU Composite PMI at 46.1 remembering that under 50 is contraction! The EUR sits at 1.2900 and the GBP slipped to 1.6075.

Equity markets were trading flat after the poor economic news from Asia and Europe. The upside was some promising news from the US in the form of rising Private Sector Jobs. The ADP Jobs report revealed an increase of 162,000 which may bode well for the all important Non-Farm Payrolls Friday. The weak economic situation has seen a fall in demand with flagging growth. Oil has slipped back with other hard commodities and this trend is likely to continue.

Fundamentals point to contraction so reduced demand will impact input prices with Oil front and centre. Australia has experienced this with the collapse in the price of Iron and Coal leading to a fall in profitability and thus investment.

The RBA has acted by cutting the cost of capital and reducing interest rates. They need to cut them closer to zero to stimulate the local economy and take the heat off the currency which is destroying trade exposed sectors. The Reserve Bank in NZ needs to respond in kind and have a look at rates in Europe and the US. Most Western countries have rates close to zero thus exposing commodity currencies with higher yields. There can be no inflation without growth although energy and food prices continue to rise.

The Reserve Bank has resisted more interest rate cuts to prevent a Housing bubble but this is unavoidable until the cost of housing falls. The cost of housing has been due to the National supply thus the pressures of price comes from the lack thereof. Interest rates must be lower to offset international pressures and the global recession.

The AUD has reacted to the rate cut falling to 1.0200 although the KIWI has remained stubbornly high at 0.8180. Look for Non-Farm Payrolls and Central bank activities for market direction.

Image of the Day HISPANIA - Les Voiles de Saint-Tropez -  © Rolex-Carlo Borlenghi  

Collinson FX market Commentary: October 3, 2012

The RBA surprised economic pundits by cutting rates from 3.50 to 3.25%. Calls from across the struggling economy were heard as economic conditions have deteriorated accentuated by the decline in mining prices and thus revenues.

The RBA also recognised the relative uncompetitiveness the AUD has had on trade exposed sectors including Manufacturing, Tourism etc. The cut in rates hit the AUD, which has fallen a cent to 1.0265, and weakened against crossrates improving export conditions being eroded by moves from Central Banks from the US to Europe.

The cut reflected weakening Global Economic conditions and the refusal of the Spanish to accept a bailout pushing equities lower. In the US this was not swallowed well and the boost received from yesterdays Manufacturing data was not enough to ignore the fundamentals which point to a global recession including the US.

The US is now firmly in election mode with the fiscal cliff likely to spawn fear in investors hearts and wallets. Four more years of economic stagnation may be a great reason to boot out the architect of European Socialism in America!

The KIWI held strongly, despite moves across the Tasman, with the NZD holding 0.8275 and gaining against the AUD moving to 0.8050(1.2400!).

Image of the Day - Oracle Team USA - Day 4, San Francisco -  Guilain Grenier Oracle Team USA©  

Collinson FX market Commentary: October 2, 2012

Equity markets rallied strongly for the new quarter in Europe and the US. European markets received a boost with the Spanish Banks 'passing a stress test' thus enabling Moodys to relent on a downgrade. The risk aversion subsided and equity markets pushed north .

The positive start spread from Europe to the US and was super charged by the Manufacturing data. The ISM Manufacturing Index broke into expansionary territory rising to 51.5 from 49.6 defying recent regional manufacturing reports. Ben Bernanke appeared and reinforced QE infinity extolling it's virtues,. The argument is cheap money will boost investment in housing, equities, business etc, creating greater wealth thus boosting consumption. It has worked superbly well for the last few years in destroying real wealth as the USD slides in relative terms!

The boost to Housing from previous QE has been negligible and this continues to weigh on the economy with construction spending falling for the seventh straight month to -0.6%!

A surge in equities was not reflected in the risk currencies with the AUD holding 1.0375 and the KIWI just below 0.8300. Gold remains popular with the erosion of currencies through Central Bank stimulus.

Central Banks will be watched closely this week with rate decisions across the globe led by the RBA today. The RBA is not expected to cut rates, in surveys of economists, but many believe there is scope for action with low inflation and flagging growth. A surprise cut may well hit the currency!

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.


by Collinson FX

  

Click on the FB Like link to post this story to your FB wall

http://www.sail-world.com/index.cfm?nid=102640

12:39 PM Fri 5 Oct 2012GMT


Click here for printer friendly version
Click here to send us feedback or comments about this story.

Click for further information on
2011 Collinson & Co

Related News Stories:

04 Oct 2012  Collinson FX Market Commentary: October 4, 2012 - China flat
03 Oct 2012  Collinson FX Market Commentary: October 3, 2012 - Oz Bank chops rate
02 Oct 2012  Collinson FX Market Commentary: October 2, 2012 - Equity markets rally
29 Sep 2012  Collinson FX Market Commentary: September 29, 2012 - Spanish Stress
29 Sep 2012  Collinson FX Market Commentary: September 28, 2012 - Risk appetite up
27 Sep 2012  Collinson FX Market Commentary: September 27, 2012 - Europe's on brink
26 Sep 2012  Collinson FX Market Commentary: September 26, 2012 - Treading water
22 Sep 2012  Collinson FX Market Commentary: September 21, 2012 - Data pushes KIWI
20 Sep 2012  Collinson FX Market Commentary: September 20, 2012 - Japan buys bonds
19 Sep 2012  Collinson FX Market Commentary: September 19, 2012 - KIWI on hold
MORE STORIES ...




News - USA and the World















Volvo Ocean Race: Team Vestas Wind gears up in Alicante by Richard Gladwell/Sail-World.com/nz,


























Soling North American Championship concludes on Lake Erie by Canadian International Soling Association,


























ISAF Sailing Worlds - Four champions crowned as racing wraps up
ISAF Sailing Worlds, Santander - USA finishes Top-10 in 4 classes
Outteridge and Jensen – What doesn’t kill you makes you stronger
ISAF Sailing Worlds, Santander - Giles Scott wins Gold
Santander Worlds - 49ers Burling and Tuke clear ahead
ISAF Sailing Worlds – Live broadcast - Medal races
Starboard Hatteras Wave Jam day 5
WMRT Chicago Match Cup 2014 – GAC Pindar through to the semi-finals
Bart’s Bash 2014 at Royal Hong Kong Yacht Club in Victoria Harbour
Bart's Bash: First event in at Wakatere in New Zealand
ISAF Sailing Worlds Santander 2014 - AUS Laser and 470 Medals + video
2014 Patriot Regatta - U.S. Coast Guard team wins
2014 ISAF Sailing World Championships - Santander - Day 9 highlights
2014 Etchells North American Championship – Day 2
Chicago Match Cup - Top four tour teams tackle tomorrow in semi-finals
470 Men and Women Worlds - Champions decided in Santander
ISAF Sailing Worlds, Santander: 49er and Nacra 17 world titles claimed
ISAF Sailing Worlds - Caleb Paine through to Finn medal race + video
ISAF Worlds - 49er, 49erFX, Finn and Nacra 17 Rio 2016 spots taken
ISAF Sailing Worlds - 470 Women's medal race images by Thom Touw
ISAF Sailing Worlds, Santander: Scott all set to lift Finn world title   
ISAF Sailing Worlds - 470 Men's medal race images by Thom Touw   
ISAF Sailing Worlds, Santander - Aussies and Austrians claim 470 gold   
ISAF Sailing Worlds, Santander: 470 awards images by Sail-World.com   
ISAF Sailing Worlds, Santander - 470 medal race images by Jesus Renedo   
Annapolis-to-Newport Race - 'What to Expect' Seminar to take place   
Royal Cup Marina Ibiza - No racing on penultimate day   
Belcher takes record fifth 470 World Championship   
ISAF Sailing World Championships - Santander - Day 8 video highlights   
2014 Great Lakes Team Racing Championship about to set off   
2014 Etchells North American Championship - Day 1   
2014 U.S. Multihull Championship - Day 1   
2014 Chicago Match Cup - Repechage top four determined in final flight   
J/24 World Championship - 35th anniversary preview   
470 Men and Women Worlds - Santander medal race line-up confirmed   
ISAF Sailing Worlds, Santander - Day 8 images by Sail-World.com   
Royal Cup Marina Ibiza - Quantum Racing stumbles in coastal race   
ISAF Sailing Worlds, Santander - Americans ready for 470 medal races   
ISAF Sailing Worlds, Santander: Action ramps up with end zone in sight   
Big Boat Series - It's not the size, it's the length   


For this week's complete news stories select    Last 7 Days
   Search All News
For last month's complete news stories select    Last 30 Days
   Archive News





Sail-World.com  


















Switch Default Region to:

Social Media

Asia

Australia

Canada

Europe

New Zealand

United Kingdom


http://www.sail-world.com/event_images/image/Twitter_logo_small.png http://www.sail-world.com/event_images/image/FaceBook-icon.png  http://www.sail-world.com/event_images/image/RSS-Icon.png

United States

Cruising Northern

Cruising Southern

MarineBusiness World

PowerBoat World

FishingBoating World

 

Contact

Commercial

News

Search

Contact Us

Advertisers Information

Submit news/events

Search Stories/Text

Feedback

Advertisers Directory

Newsletter Archive

Photo Gallery

 

Banner Advertising Details

Newsletter Subscribe

Video Gallery

Policies

 

 

 

Privacy Policy

 

 


Cookie Policy

 

 



This site and its contents are © Copyright TetraMedia and/or the original author, photographer etc. All Rights Reserved.  Photographs are copyright by law.  If you wish to use or buy a photograph contact the photographer directly.
XLXL NEW US
LocalAds   DE  ES  FR  IT