Please select your home edition
Edition app (top)

Collinson FX: January 17, 2019 - Confidence returns

by Collinson FX 17 Jan 01:43 PST 17 January 2019

Collinson FX: January 17, 2019 - Confidence returns

Equity markets continued to book gains as confidence in 2019 returns. The fears of a global trade war have been allayed, with a process for negotiation in place, which has begun in earnest. The statement from senior Senator Chuck Grassley, surrounding the recent negotiations, did not help the situation. He stated that senior trade negotiator, Robert Lighthizer, said little was achieved in last weeks trade talks in China.

Markets were consumed with the Brexit chaos enveloping Europe and the UK in particular. PM May submitted her ‘Brexit Agreement’ to Parliament and received the biggest rejection in the history of the, age old, Parliament. The opposition immediately called for a vote of ‘no confidence’, which will go before Parliament today.

The chaos is bad for the country and it is hard to see PM May survive. It is now more likely that the UK will leave the EU with ‘No Deal’. This is a complete failure of the Politicians that were never in favour of leaving the UK and have failed to represent the wishes of the people, who do. The EU will panic and attempt to put some make-up on the pig. They will fail. The GBP lost more than a big figure in a lead up to the Parliamentary vote, but recovered to trade 1.2850, post vote. The chaos continues until the leave date at the end of March.

The US/China trade negotiations continue and the rhetoric impacts the trade exposed currencies. The negative vibes filtered through to these commodity currencies, with the AUD slipping below 0.7200, while the NZD drifted below 0.6800. Focus remains on the ‘Brexit’ catastrophe and the slow motion train crash, that it is, while global economic data remains scarce.

Collinson FX: January 16, 2019 - Europeans expected to buckle

Equity markets continued to benefit renewed confidence, posting further gains in the 2019 year. Favoured tech stocks posted strong gains as the Banks commence reporting earnings. Early in US market trade there was a hiccup, when US Senator Grassley commented that US Trade Representative Lighthizer, had said little progress was made in last weeks China/US trade negotiations. Markets quickly regained confidence and added to previous gains.

German GDP was in line with expectations, 1.5%, but well below the previous 2.2%. Despite the weak growth data, strong EU trade numbers mitigated any weakness. European markets have been high-jacked by the Brexit chaos. The UK Parliament takes a key vote on PM May’s proposed trade agreement, which is widely expected to fail and miserably. This defeat is going to add to pressure and brinksmanship between the UK and the EU. Failure to reach an agreement will mean a ‘No Deal Brexit’ at the end of March. The Europeans will buckle, as they have too much to lose, with massive trade exposure and financial reparations to lose. If not, Brexit will be sudden and will work out through necessity. The GBP retreated to 1.2740, ahead of the key vote, but only returns some of the recent gains. The EUR also fell lower, drifting below 1.1400, as the reserve rallied.

Commodity currencies are extremely exposed to US/China trade talks and the revelations surrounding Lighthizer’s comments, turned the associated currencies south. The AUD slipped back below 0.7200, while the NZD tests 0.6800, on the downside. Economic data is having a minimal impact on markets, driven by macro-events, trade and Brexit. A look at Australian Consumer Confidence and NZ Credit Card spending may enlighten a few to consumer sentiment, locally?

Collinson FX: January 15, 2019 - Markets much more positive

Markets were off to an anti-climatic week, after posting solid gains in equities for the year to date. Chinese trade data exemplified the problem in the US/China trade war. Chinese Exports and Imports both contracted sharply, worrying signs that the trade war is impacting global trade and growth, while the trade surplus for 2018 was at record highs. The threat to global growth and trade, puts further pressure on China to make a deal with the US, while the surplus validates the arguments from the Trump administration. Equities moved lower across Asia and Europe. European markets are consumer by the Brexit crises and growth threats, with the latest economic data confirming a contraction in EU Industrial Production.

The underlying sentiment in the markets are much more positive than the closing quarter of 2018. Softer economic data reflects the global growth story. The Dollar remains weaker, with the EUR trading 1.1470, while the GBP squeezes higher to 1.2880. The structured negotiations process of US/China talks have imbued confidence and allowed trade exposed countries to rebound. The AUD is trading around 0.7200, while the NZD attempts to hold 0.6800, but both remain extremely vulnerable to negative rhetoric.

Not a huge week for economic data releases although there will be high interest in the Fed and the minutes release later in the week.

Catch the new look Collinson FX website at

Disclaimer: The details expressed in this website and accompanying documents or transmissions are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Collinson Forex Ltd accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the information contained or related to this site

Countries: | NZ: 0800 338 838 | AU: 1800 143 415 | NY: 1888 6257 833 | UK: 0800 0285 834 |

Related Articles

Collinson FX: April 16 - Kiwi waits for data
The AUD is trading around 0.7175, while the NZD holds above 0.6750, awaiting important economic data Chinese exports exploded in their latest data release, more than doubling expectations Posted on 15 Apr
Collinson FX: April 5 - European frustration
The NZD traded around 0.6750, tentative and vulnerable to the US/China trade negotiations The Chinese/US Trade negotiations seem to be building to a crescendo. President Trump is expected to meet with the Chinese trade delegation Posted on 5 Apr
Collinson FX: April 2 - Oz announce budget surplus
The Government is set to announce the first budget surplus since the Howard/Costello Government The Government is set to announce the first budget surplus since the Howard/Costello Government, in an attempt to fight the election on it's financial credibility. Posted on 2 Apr
Collinson FX: March 20 - Oz house price slide
The Dollar was soft, with the AUD trading just below 0.7100, while the NZD pushed up to 0.6850. The RBA minutes revealed threats to the Australian economy thus ensuring a dovish, balanced monetary policy. The RBA took note of sliding House Prices (further exemplified in the latest data) which is hurting consumer spending, Posted on 20 Mar
Collinson FX: March 18 - US/China Trade rolls on
The AUD held 0.7080, while NZD traded 0.6840, although NZ preoccupied and shocked by terror hit The UK is in a disastrous predicament with no easy way out. The disconnect between the people (who voted to Leave) and the ruling class (who majority want to Remain) will end in tears. Posted on 18 Mar
Collinson FX: March 8 - ECB goes into reverse gear
The AUD remains vulnerable, trading just above the Big, Big figure of 0.7000, NZD holds 0.6750 Australian GDP missed expectations, coming in at just 0.2% for the final quarter of 2018, bringing the annualised GDP growth back to 2.3% from 2.7%. The blame was clearly laid at the door of global demand and growth Posted on 8 Mar
Collinson FX: Feb 27 - Kiwi on the move
The AUD trades 0.7170, while the NZD pushes up to 0.6880, supported by the global growth prospects. Trump is completely changing the face of the Asian continent and the China/US agreement is an integral part of this process. The AUD trades 0.7170, while the NZD pushes up to 0.6880, supported by the global growth prospects. Posted on 26 Feb
Collinson FX: Feb 22 - China/US deal by March 1
The AUD plunged to trade 0.7070, dragging the NZD back to 0.6800, after China message China and the US are coming close to the trade deadline of March 1st. This will force China to take more US exports thus allowing them to cut from existing suppliers, NZ and Australia among them. Posted on 24 Feb
Collinson FX: Feb 14 - Oz Govt trying to hang on
The NZD spiked to 0.6850, although it eased back to 0.6800 in overnight trade US continues trade negotiations with China and a new trade deal looks imminent. The NZD spiked to 0.6850, although it eased back to 0.6800 in overnight trade, while the AUD regained 0.7100 despite political turmoil. Posted on 13 Feb
Collinson FX: February 4, 2019 - US boom begins
The softer reserve has allowed the commodity currencies to benefit, the NZD holds 0.6900 The strong US/China trade negotiation process has settled the market uncertainty, with the reassuring process. The heavily trade exposed nations remain extremely exposed to this progress. Posted on 3 Feb app (top)