Collinson FX market Commentary: May 7, 2013
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Equity markets were steady after the substantial gains of last week boosted by an ECB rate cut and a better than expected Non-Farm Payrolls. European markets absorbed steady PMI numbers but falling ECB Retail Sales.
The endless recession spurred Draghi back to the microphone where he promised to take whatever action necessary to right the ship.
The immediate impact was felt in the currency with the EUR falling back to 1.3075. The US markets were steady with the DOW hitting 15,000 on Friday but failing to hold and has now set a benchmark. There was little local news but plenty to come, plus add in the developing situation spreading war across the Middle East! The AUD slipped lower to 1.0250 in preparation for an expected cut from the RBA this week.
Australian Retail Sales contracted and Job Advertisements also fell 1.3%. Economic fundamentals have been deteriorating in Australia for some time and now they are amidst the 'longest election campaign in History', expect unprecedented volitility.
The KIWI held 0.8500 and continues to book gains against its trans-Tasman cousin. Testing times on the Geo-Political front with economic fundamentals hardly inspirational.
Collinson FX market Commentary: May 6, 2013
Non-Farm Payrolls came in better than expected fueling the rally in equities. The Dow has now toyed with the 15,000 level and the endless rally continues with no likelihood of Bernanke turning off the liquidity taps. This boosted the EUR which moved back to 1.3115 and the GBP to 1.5565.
Risk appetite continues to flourish boosting associated higher yielding currencies. The AUD breached 1.0300 and the KIWI moved over 0.8500 once again. The rally has been sustained by concerted Central Bank intervention and seems likely to continue until fundamentals tip the balance and cause reality to crash the party. Non-Farm Payrolls gained 165,000 with Unemployment falling to 7.5%.
The good news supported the markets despite Factory Orders falling 4%.
The new week will bring more economic data analysis and perhaps consideration of an interest rate cut in Australia. This is May!?
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by Collinson FX - 9:13 PM Mon 6 May 2013 GMT
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