Collinson FX Market Commentary - Nov 4 - Markets have a Trump-Think

by Collinson FX on 4 Nov 2016 Collinson FX Market Commentary - Nov 4 - Markets have a Trump-Think

Nov 4 - Markets continue to digest Donald Trump. Shades of 'Brexit' and the sky is falling in!? The realisation will come, the Four Horseman of the Apocolypsa will not be dropping by, the economy may well benefit. Tax cuts and fiscal responsibility may be what is required!

The EUR trades 1.1000, but the GBP continues to defy global analysis, moving up to 1.2450! Every post is a winner, now the UK has castoff the socialist EU shackles, becoming a fully fledged global trading power. Oil has fallen back to $44/Barrrel, with OPEC in dire straights, with the advent of Iran.

NZ Dairy prices and relative economic stability have shored the currency up, with the NZD holding above 0.7300, while the AUD meanders below 0.7700. US elections and polls remain the definition of markets for the week.

Collinson FX Market Commentary - Nov 3 - Big jump for KIWI in X-Rate
Nov 3 - The Fed left rates unchanged, as expected in the lead up to the US Presidential elections, although rhetoric continued to point to a rise in December. Employment and now growth have improved enough to enable the Fed to finally reduce QE. The Fed had telegraphed at least 3 rate rises, this calendar year, but has had many economic excuses to decline.

The ADP jobs report came in lower than expected, with fewer jobs generated in the private sector, while Oil continued to collapse. The Dollar has been weaker, along with equities, but the seed was the rise in the polls for Trump! Uncertainty that the 'outsider' brings, is destabilising the establishment in markets, as well as politics. The EUR rose back to 1.1100, while the GBP regained 1.2300, with a long slow climb ahead.

The NZD surged towards 0.7300, after employment numbers beat expectations, enhanced by the sliding reserve. NZ Unemployment fell to 4.9%, while participation rose above 70%, higher than most comparative western economies. This enabled the cross rate with the AUD to gain more than a cent, as the AUD held around 0.7650, providing a massive economic contrast between Trans-Tasman cousins.

Collinson FX Market Commentary - November 2 - FBI move spooks US
Nov 2 - US Equity markets have the political jitters, ignoring economic data, while reacting negatively to political news. The FBI bombshell, last Friday, put a cat amongst the pigeons. The polls have reacted strongly to the announcement that the FBI was investigating Clinton again! She represents the status quo, triggering panic and uncertainty, allowing a sell off in equities.

The Dollar slipped, with the EUR moving back up to 1.1050, while the GBP jumped to 1.2250. The RBA and Bank of Japan both declined any action on the interest rate front, leaving QE as is, allowing settled currency action.

The NZ Dairy auction was a huge success, rising 11.4%, but failed to inspire the currency, with the NZD trading around 0.7150. Markets now look to the FOMC and US Employment data for direction although the dominant force will remain the ebb and flow of US Presidential polls.

Collinson FX Market Commentary - November 1 - Oil slides as OPEC melts

Nov 1 - Markets remained calm to begin the week, as Oil continues to give ground, falling to $47/barrel as the OPEC supply agreement unwinds. EU CPI was static, holding 0.5%, reflecting the lack of growth in the contrived socialist Union.

The EUR dipped below 1.1000, while the GBP consolidated above 1.2200, amidst speculation surrounding the Bank of England Governor. Carney was seen as an anti-Brexit, attracting great pressure to resign, although it looks as though he will survive.

US Personal Income was flat, while Spending rose, reflecting the loose nature of monetary conditions. NZ Markets await the latest Dairy Auction, which is expected to continue recent rises, allowing the KIWI to trade around 0.7150. The AUD is holding above 0.7600, ahead of the Melbourne Cup rate decision, but the RBA is not expected to use the 'Great Race' as cover for any surprise.

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