Collinson FX Market Commentary- Mar 7 - Oil price drops below $50

by Collinson FX on 8 Mar 2015 Collinson FX market Commentary: March 7, 2015

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Mar 7 - US stocks crashed to finish the week in an alternate universe. The world in which, good news is bad, and vica-versa! Global markets have been corrupted by Central Bank interference. In an effort to counter fiscal ineptitude, Central Bankers have vastly expanded Money Supply, increasing liquidity and knocking the balance of the free markets.

Non-Farm Payrolls improved to 295,000 jobs added, while unemployment fell to 5.5%! This was enough to lead to speculation of a Fed interest rate rise and slammed equities. EU GDP is anaemic and warrants drastic fiscal action and a demolition of the single currency. Instead the a ECB prints more money! The EUR flounders around 1.1000, while the GBP trade 1.5240, not immune to the EURO tragedy.

Commodities drifted lower with Oil slipping back below $50/barrel. Associated currencies continued to drift, with the AUD falling to 0.7777, while the NZD traded below 0.7500. The coming week will focus on the consumer and growth, while Central Banks remain the elephant in the room.

Collinson FX market Commentary: March 5, 2015

Mar 5 - US Equities continued to withdraw from record levels, despite positive Composite PMI data, ahead of the Biege Book release from the Fed. The Biege Book will continue to see an economic recovery story, although tortured, giving the Fed a reason not to raise rates. The ADP jobs report revealed a fall in private sector jobs, although in line with expectations, ahead of the Non-Farm Payrolls. The EUR held 1.1200, while the GBP slipped back to 1.5250, ahead of expected Bank of England neutrality tonight.

The ECB will expand detail on the massive QE today coinciding with the rate decision. Central banks continue to dominate market direction, all the while, diagnosing economic data symptoms. The NZD is pushing up towards 0.7560, while the AUD consolidates above 0.7800, supported by steady GDP growth at 2.5%. Commodity currencies remain relatively strong, with jawboning from their respective Central Banks, failing to impact attractive interest rate differentials.

All eyes on the ECB and Bank of England. The NZD currently trades 0.6835 and 0.4950 against the EUR and GBP, both booking major gains. The NZDAUD cross tried its luck at 0.9700 overnight but retreated to trade 0.9680 this morning, still very strong.

Collinson FX market Commentary: March 4, 2015

Mar 4 - Equity markets and the Dollar retreated overnight, from elevated highs, driven by Central Bank activity. Markets keenly await the detail of the ECB's QE policy to be elucidated Thursday. The Bank of England will also reveal policy which may stall a tightening bias.

Currencies have reflected this but a stall in the USD overnight allowed the EUR to rise back above 1.1200, while the GBP approached 1.5400. The RBA surprised many, leaving interest rates unchanged, giving the local currency a boost.

The AUDUSD jumped to 0.7835, keeping the powder dry, supported by strong building approvals.

The NZD fed off these cross Tasman moves, pushing above 0.7550, putting pressure on the local RBNZ. Economic data will be center stage until Thursday night when the ECB and BofE announce.

Collinson FX market Commentary: March 3, 2015

Mar 3 - China gave markets a pleasant surprise over the weekend with an interest rate cut.

Chinese Governments officials must set the growth targets, and to achieve any where near 7% would require stimulus, hence the interest rate cut. The stimulus was good news for global markets, with the European markets enhanced by Manufacturing data improvement, and US PMI also jumping. CPI in the EU was benign allowing the ECB expansion of QE.

Equities rallied with the NASDAQ hitting 5000 for the first time since 2000. The Dollar rallied, watching the EUR slip back below 1.1200, after early rallies above. The GBP dropped back to 1.5350, despite Manufacturing growth, and strong prospects. The good news from China boosted commodity demand and associated equities but USD strength negated currency gains. The AUD traded 0.7755, ahead of the all important RBA rate decision, this morning.

Pundits are expecting another cut, conforming to global Central banks, but failure to cut could see a strong currency rebound. The NZD fell back to test 0.7500, on the downside, reflecting USD moves but remains vulnerable to cross Tasman RBA action. The NZD currently trades 0.6685 and 0.4866 against the EUR and GBP. The NZDJPY cross has failed to hold onto 90.00 levels, falling off this overnight.


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