Collinson FX Market Commentary - Aug 31 - Germany has zero inflation

by Collinson FX on 30 Aug 2016

RNZYS Winter Series August 27, 2016 Richard Gladwell www.photosport.co.nz

Collinson FX Market Commentary - Aug 31 - Germany has zero inflation

Aug 31 - German inflation data was concerning, with the CPI coming in at 0.0%/month, reflecting the indigent growth rates in the failed EU. The DOW gave up much of yesterdays gains with little to wave the flag about on the economic front.

Inertia is a threat to the US economic recovery, followed by overwhelmed deficit/debt, empowered by QE. The Dollar regained some ground, with the EUR slipping to 1.1140, while the JPY broke back above 103.00. The GBP dipped below 1.3100 as markets realise the Fed will not act!

Commodity currencies were impacted by the rising reserve. The NZD is now testing 0.7200, on the downside, while the AUD trades around 0.7500. The Australian Building approvals jumped 11.3%, contradicting the big fall in yesterdays New Home Sales, thus virtually ignored. Markets focus on Employment and Growth and the impact this has on Central Bank QE.

RNZYS Winter Series August 27, 2016 © Richard Gladwell www.photosport.co.nz

Aug 30 - US Equities rallied strongly, after markets consumed the Yellen address to Jackson Hole, concluding no rate rise!

The Dollar also slipped back, with the EUR moving back to 1.1200, while the GBP traded 1.3115. The Dallas Fed Manufacturing Activity Index plunged 6.2% and with no other major economic data release, markets remained assured that there was no economic threat to demands of a Fed rate rise.

The NZD stabilised around 0.7250, while the AUD pushed to 0.7570, despite a dive in New Home Sale (9.7%)!

Strong economic data results may lead to Central Bank speculation but record QE remains the enduring scenario.

Collinson FX Market Commentary - Aug 28 - The Folly of Jackson Hole

Aug 28 - Janet Yellen is nothing, if not predictable, continuing to talk interest rate hikes. The rhetoric does not match the action! If you were gullible enough to believe the nonsense Central Bankers spout then you might have faith in the honesty of our political leaders! Jackson Hole is a gathering of Central Bankers where they publicly talk the market up but quietly confirm the propaganda they must recite to markets to hide the problem.

Record liquidity through Monetary Policy has done nothing to stimulate growth but created massive asset bubbles. Fiscal ineptitude is camouflaged by Monetary expansionism. Whomever believes the rhetoric is naive. The EUR traded 1.1200, while the GBP fell back to 1.3130, after a green shoot rally. Commodity currencies were impacted by the rising reserve, with the AUD falling below 0.7600, while the NZD crashed to 0.7220.

The US GDP fell back to 1.1%, to historical lows for the post GFC economy, but the second pillar will respond. The Employment number is set to be stellar, but do not be misled, look at participation!

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