Collinson FX market Commentary: November 3, 2012
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Confidence fell on the equity markets after a slight rise in the US Employment rate and the growing uncertainty surrounding the US Presidential Elections.
Non-Farm Payrolls added 171,000 beating expectations but the greater return to the Labour force raised the Unemployment rate from 7.8% to 7.9%!
This was a reversal of last months report and was the last significant economic report before next Tuesdays Presidential Election. The tighness of the race has created uncertainty with the Bulls on the Romney horse in the Melbourne Cup day Ballot.
The week will also be dominated by Central Bank rate decisions in Australia, UK and the ECB.
The RBA may cut rates with many focused on Flemington rather than interest rates! Markets will remain nervous and the flow to the safety of the USD pushed the AUD back to 1.0335 and the KIWI to 0.8250.
Risk appetite will be determined by the election results so will effect the commodity currencies.
Collinson FX market Commentary: November 2, 2012
Markets rallied strongly Friday as the recovery from Hurricane Sandy powered ahead and becomes a memory for most that were not directly affected. November kicked off strongly with a rally in equities and commodities with support from stronger economic data.
The ISM Manufacturing Index rose to 51.7 reinforcing recent gains pushing the sector to support the recovery. Consumer Confidence hit 72.2 from 68.4 and a four year high signalling a turnaround with many hopes pinned on the Romney victory. The ADP Jobs reported that the Private Sector added 158,000 new jobs under their new calculation techniques.
Unfortunately the Challenger Jobs reported a rise in Job cuts expected. The rise was 41% on the previous month and 11.6% on last year. The mixed reports mean an even greater focus on Non-Farm Payrolls expected to add 125,000 jobs with Unemployment to remain just below 8.0%.
The EUR traded 1.2930 and the GBP 1.6120 with a resurgent US supporting the Dollar. Commodities traded stronger with the AUD boosted by strong data from China.
The Chinese Manufacturing PMI rose again supporting demand pushing the AUD to just under 1.0400 and the KIWI rallying up to 0.8255. Confidence is filtering through the economy with the Presidential Election next Tuesday and many seeing a growing light in the shortening tunnel. Relief may be at hand!
Collinson FX market Commentary: November 1, 2012
US Financial markets reopened for the first time since the devastation wreaked havoc upon the North East of America. Thin trading ensued with damage effecting capacity and preoccupying many.
The Chicago PMI rose to 49.9 which is an improvement but remains in contraction mode. The election campaign will resume with the final day Tuesday and it couldn't be higher stakes. The EUR rose to 1.2950 after EU unemployment number came in at 11.6% and Inflation remained flat. Chinese leading indicators moved up to 100.49 boosting demand and commodity currencies.
The AUD rallied to 1.0370 supported also by strong rises in Building Approvals and Permits. The KIWI also held around.8200 boosted by demand and a strong housing sector. Attention turns to the all-important Non-Farm Payrolls in the US Friday with some revised numbers from ADP.
Private Sector Job claims were revised lower for September and October and will be a guide to the NFP. This will be the last major scheduled economic event before America hits the Polls so it could be hardly more important!
Collinson FX market Commentary: October 31, 2012
US Financial Markets were closed as 'Super Storm Sandy' devastated the North East of America.
In a region not used to storms of such magnitude, Sandy committed enormous damage which will require huge efforts and resources to remedy. Markets remain closed until tonight but expectations are not high. Mother Nature does not have a great deal of consideration, in terms of timing, reference the Presidential Election cycle although it is probably a welcome relief to Swing-State voters.
In Europe markets rose after a relatively successful Italian Bond issue and Spanish GDP Contraction in line with expectations. EU Industrial, Economic and Consumer confidence all drifted lower as to be expected with economies contracting under the austerity measures engulfing the Economic Zone.
The EUR traded 1.2950 and the GBP 1.6050 with attention focused on the US Super Storm. Commodity currencies remain attractive as an investment away from the mayhem of the US and Europe. The AUD traded up to 1.0350 after New Home Sales fell 3.7% extending a decline in the housing market. The KIWI tested 0.8200, but remains susceptible to market vulnerabilities.
The focus will be the US Presidential Elections until Melbourne Cup day when we can all take breather and watch the RBA!
Collinson FX market Commentary: October 30, 2012
Markets closed in the US as the Super-Storm Sandy makes its way up the East Coast of the US spreading mayhem.
The storm has closed financial markets and will probably remain closed until the passing allows a return to normality and a clean-up operation can begin. This has not only disrupted the financial markets but forced the culmination of the Presidential Election campaign to alter course.
In Europe markets drifted lower as authorities continue to debate the Greek bailout with Labour reforms now a question vigorously contested along with debt write-off. The overwhelming debt levels will demand debt write-off as the budget will not service the current levels. Authorities do not want to address this issue as it debunks the argument for the bailout in the first place.
The funding of Greece was portrayed as a series of loans to transition Greece to a viable functioning EU member. The EUR traded around 1.2900 and the GBP 1.6025 with members addressing the EUR$1 Trillion budget and attempting cuts of EUR$50 Billion.
It is astounding that these bureaucrats have a budget this size on top of and in addition to all member National Budgets!?!?.
Antipodean currencies dragged into the boredom with not much movement,AUD/USD 1.0300 & NZD/USD .8155.
The markets will remain static while the weather overwhelms the US with a focus on employment later in the week and the crescendo of the Presidential elections.
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by Collinson FX - 8:49 AM Sat 3 Nov 2012 GMT
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