Collinson FX Market Commentary - Oct 22 - USD finds some legs

by Collinson FX on 24 Oct 2016 Collinson FX Market Commentary - Oct 22 - USD finds some legs

Oct 22 - Markets were steady overnight with little economic revelations. The focus in the US was on San Francisco Fed President, John Williams, who confirmed a strong Employment report and functional economy. The employment report is a statical distortion with plenty of signs of corruption.

General economic data has been benign confirming the weak economic situation that has prevailed post-GFC. Political leadership is reflected well in the economy. The Dollar found some legs, with the EUR moving back to 1.0850, while the GBP slipped to 1.2225. Commodities drifted, impacting the associated currencies, eventually .

The AUD has crashed back to 0.7600, while the NZD has finally found logic, falling to 0.7150. Central Bank speculation will be the primary driver of currency and equity markets in the coming week.

Collinson FX Market Commentary - Oct 19 - Aussie jobs concern
Oct 21 - Markets were volatile in Europe overnight with the ECB rate decision. Draghi opted to leave rates unchanged and the QE program as is. The market disruption came from the refusal to address questions on the future of QE/tapering. US markets were steady after the wave of uncertainty passed. Existing Homes Sales were steady (3.3%), while the Leading Indicators remained flat.

The Dollar was temperate, with the EUR trading 1.0950, while the GBP held 1.2265. The AUD was hit hard by some ordinary employment data, slipping back to 0.7630, after breaching 0.7700. Australian unemployment dipped to 5.6%, but the underlying data scared markets, with 53,000 full time job losses.

These job losses were partially replaced with part time (43,200) but the participation rate continues to fall. The phenomena is copying the US job markets and reflects a serious problem. The NZD attempts to hold 0.7200 but the heat is on!

Collinson FX Market Commentary - Oct 19 - KIWI surges again

Oct 19 - The earnings season is roaring across most sectors, lead by the financials, bolstering support for the equity bubble. Strong earnings in the global corporate world have been underwritten by cheap money, rather than demand, which is the contradiction that confounds markets.

The US inflation data was inline with expectations, rising to 1.5% p.a., but remains historically weak. This is a reflection on the extremely weak growth the US has suffered, post-GFC, highlighted in a wide variety of economic data.

This did not help the Dollar, with the EUR holding around 1.1000, while the GBP raced back to 1.2300!

U.K. Economic data continues to improve, with the CPI moving up to 1%, while House Prices jumped 8.4%. The KIWI surged on another successful Dairy Auction, testing 0.7200, while the AUD broke above 0.7650.

Collinson FX Market Commentary - Oct 18 - US data disappoints

Oct 18 - Equity markets drifted lower after some further disappointing manufacturing data out of the States. The Empire State Manufacturing report revealed a contraction of 6.8%, confirming recent trends, while encouraging monetary stimulus. This did little for the recent rally in the Dollar, with the EUR approachiñg 1.1000 again, while the GBP trades around 1.2200.

Keen interest will be focused on the US CPI number, as a gauge on growth and the Biege Book. Commodity currencies rallied on the back of a weaker reserve, with the NZD jumping above 0.7100, while the AUD consolidates over the 0.7600 mark. NZ inflation data and RBA minutes will impact local markets in domestic trade.

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