Collinson FX Market Commentary - Nov 7 - AUD crashes Kiwi holds
by Collinson FX on 8 Nov 2015
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Collinson FX Market Commentary - Nov 7 - AUD crashes Kiwi Click here to find out how to get Collinson FX's free iPhone app
Nov 7 - Non Farm Payrolls took the market by surprise to close the week. Expectations were beaten lending greater support to the Feds intention to raise rates next month! Bond yields quickly rallied and the Dollar spiked. The EUR plunged to 1.0725, while the GBP collapsed to 1.5040, spurred by some weak Manufacturing and Industrial production numbers.
The AUD crashed, to trade just above the big, big figure of 0.7000, while the KIWI desperately holds above 0.6500! Employment is one of the 'two pillars' of US Monetary Policy, looking very strong, although participation rate continues to cast a major shadow over statistical validity.
The coming week will again focus on growth and inflation data from Asia to Europe. Trade data will probably confirm a contraction while US Retail Sales will be a huge impact number for markets!
Collinson FX Market Commentary - Nov 6 - Week ends weakly
Nov 6 - There was little action in markets overnight ahead of the important Non-Farm Payrolls. Employment is one of the key determinants of the Feds decision to raise interest rates next month. Yellen has confirmed that decision was 'live' although disappointing growth data means the other component, inflation, remains questionable.
Equities were flat, while the Dollar remained strong, supported by the hawkish Monetary Policy in the U.S. The Bank of England left rates unchanged, while releasing a dovish policy statement, pushing the GBP down to 1.5200. The EUR traded 1.0850, hit by contracting Retail Sales and falling factory orders in Germany.
The RBA articulated an easing bias, which did little to support the currency, which traded below 0.7150. The NZD stabilised above 0.6600 but appears vulnerable to a strong Non Farm Payrolls overnight.
Collinson FX Market Commentary - Nov 5 - All predictions contradicted
Nov 5 - Equities slipped overnight with the appearance of Fed Chairman, Yellen, in front of lawmakers. Her testimony confirmed, that the telegraphed interest rate rise for December, is 'live'! This is confirmation of previous statements and looks to contradict all predictions.
The flood of liquidity will be hardly altered and a rise in interest rates may be more symbolic than anything. It still would present a change in policy and surprise many! The Dollar rallied strongly on the news, with the EUR crashing to 1.0850, while the GBP dropped to 1.5350, deity some stronger than expected Services PMI.
Commodity currencies were equally impacted, with the AUD slipping to 0.7125, while the NZD fell to 0.6560. The stronger Dollar has filtered through to commodities and currencies, while the expected rate rise may find an excuse to re-assess!? Non Farm Payrolls will probably be in line with expectations, looking at the ADP Jobs Report, so may not impact currency moves
Collinson FX Market Commentary - Nov 4 - RBA baulks on rate increase
Nov 4 - Equities continued to book gains for November boosted by a dearth of detrimental economic data being released. U.S. Factory Orders contracted 1%, but this did little to dent investor enthusiasm, with equities jumping.
The signals from the Fed, that they will raise rates in December, has lead to a rally in Bond yields and thus the Dollar. The EUR slipped back to 1.0965, while the GBP was steady on 1.5420, awaiting a major speech from ECB President Draghi. The RBA left rates unchanged citing improving global economic conditions and lower commodity prices washing through the local economy boosting trade and prospects.
Many had expected an interest rate cut, thus the decision, prompted a rally in the AUD towards 0.7200. The NZD went the opposite direction, falling below 0.6700 on the back of a 7.4% drop in the GDT (Global Dairy Trade) index overnight. Look for local Employment data to impact the KIWI at the margins today, while the AUD could be impacted by today's trade data.
Collinson FX Market Commentary - Nov 3 - NZD sleeps after big win
Nov 3 -Equity markets booked some gains to commence a huge week of global economic data releases. China kicked the week off, with the important Manufacturing PMI remaining below the important 50% expansionary mark, reaffirming the slowing in growth.
European PMI was steady, allowing some gains in equity markets, pushing the EUR to 1.1030 and the GBP to 1.5420. Australian Manufacturing PMI dipped, but Building Approvals continued to march on, up over 21% for the year!
The AUD booked gains, pushing up to 0.7125, while the NZD slept after a big weekend. The KIWI traded 0.6830, but the local World Champions did not mind!
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