Collinson FX Market Commentary - June 4 - Low jobs cripples USD

by Collinson FX on 6 Jun 2016 Collinson FX Market Commentary - June 4 - Low jobs cripples USD

June 4 - Non Farm Payroll added 38,000 jobs, which is the worst in more than 5 years, but the Unemployment number fell to 4.7%!? The Unemployment number is unbelievable, manipulated to impress punters with a headline number that misrepresents reality, as is the case in most western democracies. The participation rate is a more accurate guideline, falling to 62.6%, which is at 1970's levels!

If NFP continues to deteriorate, then the statistics conflict the narrative suggested by the Fed and the regime, which will ultimately have repercussions. The Fed will excuse all the rhetoric, regarding interest rate rises, killing the Dollar and boosting bubbles. The jobs number was a shocker and the Dollar reflected this! The EUR jumped to 1.1375, while the Yen spiked to 106.50, testing BoJ red lines.

The GBP will continue to mirror polls on the 'Brexit' until the actual referendum. The commodity currencies took full advantage of the crippled Dollar, with the AUD spiking to 0.7360, while the NZD hit 0.6950! Global economic data contradicts all Central Bank rhetoric and ensures continued QE largesse.

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Collinson FX Market Commentary - June 2 - AUD gives up gains
June 2 - Equity markets were static overnight, as pundits await the Non Farm Payrolls and Employment numbers from the US, tonight. This has growing influence, as the Fed continues to talk interest rate rises, in the coming month or so. The US GDP number was totally underwhelming and the Feds, Beige Book, purported moderate economic growth.

They also pointed to a strong employment number, so the pressure remains on the NFP and Employment data, which will impact any telegraphed rate rise. The ADP Private sector jobs report was steady so any surprise would impact. The ECB left rates unchanged and forecast a rise in inflation, thus inferring economic growth, which has not occurred throughout this cycle.

The EUR slipped back to 1.1150, on this news, while the GBP traded 1.4430. The UK and the currency are consumed by the brexit debate. The Yen rallied, despite a rising Dollar, pushing to below 109.00. This is a safety flow, but underlying threats of intervention from the BoJ, could be tested.

The AUD gave up much of the previous days gains, falling to 0.7220, after falling Retail Sales contradicted GDP numbers. The NZD tested 0.6800, on the downside, hit by negative sentiment rather than any economic event. All eyes remain on the Non Farm Payrolls in the US tonight.

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Collinson FX Market Commentary - June 1 - AUD regains some mojo
June 1 - The long weekend enabled market analysts to consider the Feds options. Yellen has telegraphed an interest rate rise and this should come sooner, rather than later. Monetary policy is fast becoming the problem, rather than part of the solution, so Central Banks need to correct the course. Pressure has been mounting, as proof of the QE actions, is in the pudding!

For all the extreme monetary expansionism, global economies have failed to recover, as fiscal debasement continues. EU CPI contracted, reflecting the parlous nature of European economy, providing yet another reason for the UK to leave!

The EUR traded 1.1125, while the GBP gapped back to 1.4475, after 'Brexit' polls tighten. The AUD regained some mojo, pushing back to 0.7225, after a jump in export data. This is an input to the GDP number, released today, which will influence the currencies direction.

The NZD surged towards 0.6750, after a jump in Building Permits, but little should be read into housing data. The Australian story is more positive but it is all relative! It is performing better than most other OECD countries, but has serious fiscal and monetary issues, due to political incompetence. Currencies reflect a race to the bottom, desperate to find an export lead recovery, but are a sad reflection of the state of said economies.

Collinson FX Market Commentary - May 31 - All quiet on Memorial Day

May 31 - Markets were quiet, as the US celebrated the Memorial Day holiday, taking a long weekend along with the UK.

This ensured there was a quiet start for global markets with little in the way of economic data releases. The Yen continued to give ground, breaking above 111.00, with flat local retail sales. There has been a gradual degradation of the JPY, since the Bank of Japan threatened intervention, as expected.

Commodity currencies traded in a range, with the NZD testing 0.6700, while the AUD failed to regain 0.7200. Further rate cuts by the RBA or RBNZ seem unlikely considering the pending threats to raise rates by the Fed.

Central Banks remain the major driver of equity and currency markets, although economic data will influence daily moves, as will be seen for the remainder of the week.

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