Collinson FX Market Commentary - Jan 29, 2016 - Forecasts hit KIWI

by Collinson FX on 29 Jan 2016 Collinson FX Market Commentary - Jan 29, 2016 - Forecasts hit Click here to find out how to get Collinson FX's free iPhone app

Jan 29 - The Fed left rates unchanged, as expected, but the commentary was dovish. Global growth is under question and the U.S. will not be immune to the economic slow down. This triggered a sell off in the Dollar, with the EUR jumping to 1.0950, while the GBP moved to 1.4370.

This was despite weak economic confidence reports issued from Europe and stagnant GDP growth in the UK. Oil surged to $34/barrel, although settle back to $33, boosting confidence in commodities. This was after the Russians have revealed Saudi plans to reduce supply by 5%. This boosted commodity prices and the associated currencies, further enhanced by the sliding Dollar.

The AUD jumped to 0.7075 before settling lower, while the NZD traded towards 0.6500. This was later tempered, dipping back to 0.6460, with dovish RBNZ statements and lower revised dairy forecasts. U.S. Equities were lead North by the NASDAQ sparked by a massive beat in earnings from Facebook. U.S. Durable Goods Orders contracted 5.1%, while Pending Home Sales were flat, dampening any rally on the share markets. Economic data is weak and Central Bank confirmation is driving markets.

Collinson FX Market Commentary - Jan 28, 2016 - Oil prices hold
Jan 28 - Equities took a breather overnight ahead of the FOMC meeting. The Fed has resumed its 'dovish' stance, after the first interest rate rise since the GFC, leaving rates unchanged and continued monetary expansionism.

Oil held the lofty levels of $32/barrel, but remains an extreme target, as does the commodity prices. The commodity collapse has been a supply/demand function but the reserve has tested and manipulated during the intense currency wars.

The associated currencies have reacted according to the risk appetite trade, with the AUD holding above 0.70000, while the NZD attempt consolidation above 0.6500. Look for more volatility!

Collinson FX Market Commentary - Jan 27, 2016 - Oil jump drags up commodities
Jan 27 - Oil prices surged past $32/barrel, bolstering risk appetite in markets across Europe and the U.S., despite another equity sell off in China. Chinese markets are being hit hard and it appears the credit bubble is likely to cause big corrections that may lead to a serious flow on through global markets.

European equities are booking gains from further QE on a scale similar to the Feds. This did not crush the EUR, as might be expected, as Central Bank currency wars fight to the bottom. The EUR traded 1.0840, while the GBP traded 1.4250, hit by dovish Bank of England sentiment.

The 5% jump in Oil prices boosted the commodity currencies with the AUD holding above 0.7000, while the NZD is testing 0.6500. U.S. Consumer Confidence jumped, while Home Prices also booked gains, adding to market confidence. Markets remain volatile and vulnerable.

Collinson FX Market Commentary - Jan 26, 2016 - Nervous markets hard on prices

Jan 26 - Equities were flat overnight, with no major economic data releases, as oil settled above $30/barrel. The Dallas Fed Manufacturing Index contracted, in line with most manufacturing in the U.S., confirming the lack of global economic confidence!

There has been little to celebrate, with confidence collapsing, while 'risk off' moves flood market. The Dollar remained flat, as the EUR traded 1.0820, while the GBP slipped to 1.4240.

The nervous markets have been extremely hard on commodity prices, reflected in the associated currencies, with the AUD falling below 0.7000 and the NZD below 0.6500.

Holidays in Wellington, NZ yesterday, and Australia today will ensure little direction coming locally.

Collinson FX Market Commentary - Jan 22, 2016 - Markets continue to move up
Jan 22 - Market recovery continued, with Oil surging to $32/barrel, while Equities continued to claw back part of the recent losses. Share markets have benefitted the continued QE from the EU, Japan and China.

The reversal in the U.S., with the Feds first rate rise goes against the flow, will be halted and perhaps reversed. Economic data is flat, globally, while risk off trades reflect the fear enveloping markets. The Dollar has been a supposed safe haven, but is more a reflection of currency wars and QE globally.

The collapse in commodity prices have been represented in the associated currencies, with the AUD struggling around 0.7000, while the NZD remains below 0.6500. The usual flood of data will saturate markets in the coming week but it will probably be sentiment that drives markets.

Collinson FX Market Commentary - Jan 21, 2016 - Markets boosted, Oil rebounds
Equity markets rebounded, with risk on/risk off trades showing extreme swings in volatility, reflecting the worst start to a financial year. The ECB left rates unchanged, but Draghi hinted further QE may be required for challenged markets in March.

This has the immediate impact of boosting share markets and hitting the EUR. The single currency slipped back to 1.0830, loading the currency wars, while the GBP dipped to 1.4180. This sparked a rebound in U.S. equities, with some strong job number, while Philly aged Manufacturing continued to contract. Commodity currencies received a boost with the Oil price rebounding back above $30/barrel improving confidence.

The NZD looked to test 0.6500, on the upside, supported by Consumer Confidence and improving Manufacturing PMI. The AUD managed to regain some lost ground, heading towards 0.7000, deity New Home Sales contracting.

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