Collinson FX Market Commentary - Nov 10

Collinson FX Market Commentary - Nov 10 - Big boost off Trump win

by Collinson FX on 9 Nov 2016

Start of PIC Coastal Classic - October 21, 2016 - Richard Gladwell www.photosport.co.nz

Collinson FX Market Commentary - Nov 10 - Big boost off Trump win

Nov 10 - The 'Trump Effect' is here! Bigger and badder than 'Brexit'! We are now living in a new world and the pins are being lined up! Trump will be like a bull in the Obama China shop. He will act on de-regulation, as promised, releasing the US entrepreneurs! Promises of the removal of regulation will be the biggest initial stimulus for the economy.

Long-term, Trump has a succinct and effective economic plan with re-negotiation of trade agreements headlining. Many politicians and media, on this side of the world, backed the incumbent. For this reason, they got it wrong, but Trump will not block trade. NZ and Australia signed the CER agreement 33 years ago and this was an advantage to both countries. Trump will renegotiate without the kickbacks.

We can expect more focus on foreign affairs, with a lean towards non-intervention, while embracing staunch Americanism. The sun came up this morning! The Dow futures were down over 750 points, when the Trump revolution became the likely scenario, but reality has dawned earlier than expected. Equity markets staged one of the greatest recoveries in history and now trades up!.

This is a positive for markets, reflected in the Dollar, with the EUR back to 1.0940 and the GBP to 1.2400. Risk appetite went the full circle, as the NZD settled back to 0.7260, while the AUD fell back to 0.7625.

Lower taxes and deregulation are shades of 'Reaganism' and should be embraced by global markets. This should be a massive boost to world markets and a rejection of the insipid economic cycle post-GFC!

Start of PIC Coastal Classic - October 21, 2016 - © Richard Gladwell www.photosport.co.nz

Collinson FX Market Commentary - Nov 9 - Brexit on Steroids

Nov 9 - The US election day is finally here, done with all the 'talking heads' commentary, down to reality of the peoples choice! An upset victory by the Trump ticket will put a cat amongst the pigeons, as markets hate uncertainty. Equity markets jumped with Clinton positives, while losing ground, after last weeks momentum swing to Trump.

The 'Trump Effect' would be 'Brexit' on steroids, in terms of market impact, but when the dust settles will be more sober and clinical. Trump is likely to attack the Fed and trade, driving the Dollar higher, thus impacting associated currencies. Clinton will preserve the status quo, thus continued QE, expanding the money supply!

Chinese Trade was weaker than expected with contractions in both exports and imports. This was not unexpected and risk appetite improved, boosting the commodity currencies, while the Yen traded over 105.00. The AUD managed to push to 0.7730, while the NZD traded 0.7350, after a stellar recent run.

The EUR drifted to 1.1000, after weaker Trade and Industrial Production numbers, dampened enthusiasm. The GBP slipped back to 1.2400, after conflicting economic data, with mixed results from Industrial and Manufacturing production. All eyes are on the US Election.....'Huge'!

Collinson FX Market Commentary - Nov 8 - US on freeze-frame
Nov 8 - US elections will dominate markets until the results start rolling in tonight! Speculation revolves around polls, which have been closing, sending jitters through markets. Clinton seems to have stabilised at the right time, with a timely intervention from the FBI, this time in her favour!

A victory for the Democrats is seen as a boost for the status quo and Wall Street. The Dollar surged back, with the EUR retracing to 1.1040, while the GBP slipped back to 1.2400. The JPY jumped to 104.50, as confidence returned to markets, with the late polls.

The 'Trump Effect' may be the new 'Brexit', with many citizens who normally don't vote, turning out for a generational candidate. It is all speculation until the real poll, Tuesday, US time!

The AUD held on to 0.7700, while the effervescent KIWI retained its recent gains, trading 0.7300. Look out for Chinese trade data as an entrée for the main event!

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