sail-world.com
 
 
News Home Cruising Photo Gallery Video Gallery
Sail-World.com : Collinson FX Market Commentary: 9 May 2012 - Euro politics crystallise
Collinson FX Market Commentary: 9 May 2012 - Euro politics crystallise

'Derry-Londonderry at the start of Race 10 Clipper Race from San Francisco to Panama.'    Abner Kingman/onEdition

Collinson FX market Commentary: 9 May 2012

The economic repercussions of the political upheaval in Europe were starting to crystallise and manifest in the markets.

Risk off trades became the norm with equities and commodities all taking a hammering. The ramifications from the move to the left politically are beginning to clarify. The new mantra from Europe is 'growth' but how? The presumption is Keynesian in that it requires investment for growth that requires capital. Private capital is not forthcoming so that would require Governmental investment. That cupboard is bare!

Europeans will struggle to borrow further as debt levels now are at a tipping point with deficits pushing them to unsustainable levels. That leaves capital creation in the form of money printing. The ECB would need to expand an already bloated balance sheet with all the dangerous implications that involves.

The EUR held 1.3000 overnight and the GBP continued to hold steady above 1.6150.

In the US, markets were hoping for a decoupling from Europe but has found globilisation has it faults as well as advantages. The NFIB Small Business Optimism rose although economic optimism contracted. Commodity demand fell and the associated currencies look vulnerable.

The Budget was released in Australia projecting a surplus for the first time in this Labor Governments history. Most would not put a lot of stock in this as budgets have been blown with intent over the last years. This Government will be lucky to survive the fiscal year let alone bring in a budget surplus. Continuing political instability destabilises the economy and some conclusion needs to be in the offing.

The KIWI dropped to 0.7880 and also looks to the downside. May looks set to fulfill the adage!

Collinson FX market Commentary: 8 May 2012

European elections dominated markets in Europe and the US with initial reaction negative but settling after digestion. France is the core of the EU and fears that the new Socialist Leader, Hollande , would bring the tenuous balance of the EU down, subsided.

He advocates the reversal of austerity imposed on France and promoted the growth strategy. His economic plan of growth without austerity proposes raising taxes and restoring social expenditure. This economic miracle will be amazing to behold and will be a blue print for the world to follow! Increase spending and tax while reducing budgetary controls?

The impact on debt will be interesting as budget deficits resume their expansion and test debt markets. The pressure should result in a blowout in bonds and thus result in a funding crises in the near future. Resolution of this crises will be interesting and must come from the socialist economic miracle handbook.

The Greek elections saw them turn away from the major political parties who imposed austerity and sought out parties on the extreme right and left leaving a jumbled mess. Communists and Neo-Nazis now move into the mix and it is hard to see a serious political alternative emerge. Greece must now be headed out of the EUR which is probably a positive for the EURO and Greece.

The single currency dipped below 1.3000 with all the upheaval but regained the key level as markets settled in to watch developments. The US markets digested these events with little response. After all was France not always Socialist anyway? Equity markets remained calm, as did the currency, but bears love the month of May. The Aussie regained some recent losses after some positive economic data coming in to today's budget release.

Business Confidence rose as did Retail Sales with a surprising jump in Building Approvals. The only downside was a fall in Job advertisements but the currency did rise to 1.0200 again. KIWI found some support and managed to regain 0.7950.

Details of the Australian budget will be digested but the political turmoil will overshadow the economic forecasts. Europe will remain the big driver in global markets and risk appetite.


Collinson FX market Commentary: 7 May 2012

Equity Markets had their worst week of 2012 as confidence plunged fueled by weakening economic data and political uncertainty surrounding the EU.

The French Election looks likely to promote the Socialist leader, Hollande, who advocates anti-austerity measures threatening the current status quo and spreading uncertainty. The EUR continued lower falling to 1.3075 and the GBP 1.6145.

In the US markets continued to retreat after slower jobs growth in the all important Non-Farm Payrolls number. The actual employment rate dropped to 8.1% but participation continued to plummet threatening any danger of a robust economic recovery.

Commodity currencies suffered as demand fell and economic conditions deteriorated in Australia and NZ.

The AUD slipped lower to 1.0175 and could test parity short-term. The KIWI was hit hard after falling below the major 0.8000 mark has slipped lower to 0.7950.

Risk appetite has disappeared and poor employment data globally reflects the tenuous recovery. Markets will focus on the EU and in particular the French elections and the percieved consequences. Downside looks likely after a week to forget!

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=96953

7:59 PM Tue 8 May 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:

08 May 2012  Collinson FX Market Commentary: 8 May 2012 - Europe elections dominate
07 May 2012  Collinson FX Market Commentary: 7 May 2012 - KIWI drops below 80c
04 May 2012  Collinson FX Market Commentary: 4 May 2012 - KIWI plunges, AUD soft
03 May 2012  Collinson FX Market Commentary: 3 May - KIWI may drop lower today
02 May 2012  Collinson FX Market Commentary: 2 May - Australian RBA acts decisively
01 May 2012  Collinson FX Market Commentary: 1 May - Spain into double recession
30 Apr 2012  Collinson FX Market Commentary: 30 April - A week of rallies
27 Apr 2012  Collinson FX Market Commentary: 27 April - Soft US Bull Run continues
26 Apr 2012  Collinson FX Market Commentary: 26 April - US predicts moderate growth
24 Apr 2012  Collinson FX Market Commentary: 24 April - Markets unwind, Kiwi falls
MORE STORIES ...






News - USA and the World



























































America's Cup: Challenger calls Competitor Meeting ahead of deadline *Feature by Richard Gladwell Sail-World.com/nz,








Audi-Tron Sailing Series - Melges 20 fleet ready for action
Volvo Cork Week - Front runners emerge on day 3
Nacra 17 Europeans - Big winds halt racing in La Grande Motte
49er and 49erFX Europeans - Tough end to qualifying phase + Video
New Classification Code for consultation released by the IPC
Clipper Round The World Yacht Race fleet heads for London
Volvo Ocean Race - Abu Dhabi and Team Alvimedi head for England
Rio 2016 in the sights of ISAF Youth Worlds 420 sailors
Exciting new International Audi Melges 20 Ranking System now in play
FISU World University Match Racing Championships - GBR women win gold
2014 Seiko 49er and 49erFX European Championship - Day 2
Volvo Ocean Race teams Abu Dhabi and Alvimedica leave Newport, RI
Half Ton Classics Cup - Champagne conditions on Day 2 + Video
ABYC Fourth of July Regatta - Snipes join the action
Volvo Cork Week - Three bullets for ballistic catapult
Nacra 17 Europeans - Besson and Riou lead the overall standings
Formula 16 World Championship - Aussies claim title in Newport
Vestas Sailrocket 3 - The journey beckons
Clipper Round the World - London to provide emotional heroes welcome
ISAF Youth Worlds - Italians to lead RS:X fleet in Tavira
Vestas Sailrocket 3 - Over the Horizon   
Foiling Week - Italian Moth Championship - Final results   
NYYC Race Week - Yachting history on display   
Rescued sailors reach shore after dramatic ocean rescue   
Half Ton Classics Cup: Swuzzlebubble out front on Day 1 + Video   
New York Yacht Club Race Week - Yachting history on display   
Volvo Cork Week - Thrilling conditions welcome international fleet   
Nacra 17 Europeans: Success for Italy's Bissaro and Sicouri   
America's Cup: 2017 venue short-list reduced to two Cities   
Formula Windsurfing Youth and Master Worlds overall   
49er and 49erFX Europeans: Pitfalls aplenty on day 1 + Video   
ISAF Youth Worlds - Laser Radial sailors look to join list of legends   
Coville soon to chase solo circumnavigation record in giant trimaran   
Fierce competition at the Meanline Fins Slalom Challenge   
Volvo Ocean Race - Team Brunel opt for experienced winner   
Bakewell-White supermaxi designed to take Transpac's Barn Door Trophy *Feature   
Crew rescued by navy patrol from J/111 racer after Mayday in storm   
Team Alvimedica practice in Newport, RI - Photos   
18 foot skiff European Championship (Open Europeans) - Final results   
Nacra 17 European Championships - No action on day 1   


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 WAS US
LocalAds   DE  ES  FR  IT