Collinson FX market Commentary: January 23, 2013
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Equities continued to gain, supported by the flood of liquidity kindly provided by the Federal Reserve. Exisiting US Home sales fell 1% after a deluge of positive sentiment in the housing sector which may undermine the much vaunted recovery. The consumer is under pressure with unemployment remaining high and little prospect of relief from a resurgence in Capital investment. The Obama inauguration party is over and reality will now hit home.
He outlined a liberal agenda with priorities being Green Energy, Gay rights and Immigration. That should be great for the economy and address the deficit blow outs and the crippling debt. Cool subjects that the air headed social democrats and minority groups rate highly will do little to address the economic fundamentals and will spell disaster for the US. Progressive liberals seem intent on driving the worlds largest economy down the socialist road of a failed Europe.
The EUR tested 1.3300 on the downside and the GBP 1.5850 with the ZEW Economic Sentiment indicator rising but very little positive news emanating from the failed economic experiment. Commodities remained well supported due to steady Asian demand and continued weakness in the reserve currency.
These combined to support the AUD at 1.0550 and the KIWI back towards 0.8400. The strong performance of these currencies are a reflection of the weakness of the USD and EUR rather than a positive domestic economic stories. The US is going to be under severe pressure and the much vaunted housing recovery looks to be questioned with Existing Home Sales falling.
Priorities remain social issues from Obama in a time where the US faces fundamental economic questions. The Tories seem unable to offer solutions and the confrontational nature of US politics looks set to continue, which will not solve the critical questions being asked.
Collinson FX market Commentary: January 22, 2013
Markets were quiet to open the week with the US closed for MLK Jr Holiday and celebrating the inauguration of the second term Obama. There will be a lot of ostentatious grandeur across our screens so be prepared for meaningless platitudes and oration. The amazing platform outlined by Obama was his direction of climate change and green energy without a mention of the Debt or Deficit!
Astounding the priorities of this regime and dangerous which indicates a propensity for increased spending, borrowing and taxing. This fundamental liberal, progressive agenda has failed in the past and will fail again with apocalyptic consequences.
European markets rallied, boosted by the positive news regarding the 'Debt Ceiling' negotiations in Washington. The IMF has warned of growing holes in the Greek budget including the bailout, meanwhile Merkel lost a major election in Lower Saxony hinting at a resurgence of the left.
The EUR has held its ground trading 1.3315 although the GBP continues to slip moving down to test 1.5800. Commodities were still well bid which maintained support for the AUD at 1.0500.
The KIWI was steady at 0.8350 after the shock inflation data last week, hinting at weaker than expected recovery. All eyes will turn to the US markets when they open tonight!
Collinson FX market Commentary: January 21, 2013
Equities closed the week flat again after some good news from the GOP in the House of Representatives. The House proposed the extension of the Debt Ceiling until April 15th with a budgetry requirement from the Senate and the House.
This has supported the high levels attained from gains so far this year. News from China was positive with GDP growth moving up to 7.9% for the year. This has leant support to the associated commodities and currencies.
The AUD held 1.0500 athough the KIWI dipped to 0.8350 after an unexpected contraction in the CPI reflecting the parlous state of the economy. European markets were hardly filled with confidence after UK PM Cameron voiced concerns over the future of the EU and British participation.
The University of Michigan Consumer Confidence fell to 71.3 from 72.9, dissappointing many market participants. The coming week will continue to look at Earnings and Economic data but will not see much action until Tuesday due to MLK Junior holiday in the US!
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by Collinson FX - 12:11 PM Wed 23 Jan 2013 GMT
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