Please select your home edition
Edition
SW newsletters (top)




Collinson FX: Aug 7 - The world needs Trump to succeed

by Collinson FX 6 Aug 2019 11:07 PDT 7 August 2019

Collinson FX: August 7, 2019 - The world needs Trump to succeed

Markets rebounded strongly, after the savaging on the previous day's trade. The US/China trade war is the genesis of the market upheaval, but the cold calm evaluation of the situation, would reveal a hint of desperation from the Chinese. The Chinese have exploited their position in global trade since their much vaunted inclusion in the WTO many years ago, making every post a winner. The exploitation of preferential trade terms and the constant and enormous industrial level IP theft, have enabled the Chinese to become the second biggest economy in the world. Donald Trump is determined to halt the international criminal activity and balance the trade book. The Chinese are resisting but many are beginning to realise the necessity of Trump's actions. The world needs Trump to succeed.

US Equities roared back, after the Chinese central Bank allowed the Yuan to regain some strength. The word was that China had banned US agricultural imports, but that reeks of desperation, in the US/China trade war. The Chinese have exhausted trade means and have resorted to banning US imports. This only highlights the powerful position the US is in, in these trade negotiations. They have a deficit of $500 Billion and can extend and increase tariff levels, at any time, only adding to the immense pressure the Chinese are under. Any attempt to ban US agriculture exports is desperation. They may be at the end of their tether and close to surrender?

The EUR rallied back to 1.1200, while the Yen slipped back to 106.50. The Dollar has become popular again, despite the continued fall in the US bond yields. The 10 year Bond Yield has collapsed to 1.72%. The RBNZ is expected to cut rates today and offer a dovish bias to monetary policy. The NZ Employment data, released yesterday, was extremely positive and allowed the NZD to weather the international market storm. Reality is setting in and the NZD has returned to trade just above 0.6500, while the AUD has settled around 0.6750. These trade exposed currencies remain extremely vulnerable to the US/China trade wars.

Collinson FX: August 5, 2019 -

Global equities continued to lose ground, to close a week of serious losses, triggered by the ramping up of the US/China ‘Trade War’. The US announced the imposition of a further 10% in tariffs, on the balance of $300 Billion of Chinese exports, to the USA. This has triggered a major hit to equities, bonds and currencies. The flow-on effect of the trade war, is the fear of the impact on global growth, explaining the hit to Oil prices and Bond Yields. President Trump announced some positive trade news, that counter some of the losses in US agriculture, with a trade deal over US Beef exports to the EU. He pranked the press corps that the EU had agreed to a 25% tariff on Mercedes and BMW, which brought laughter after he outed to the joke.

The trade news hit commodity currencies hard, with NZ and Australia heavily exposed to the Chinese markets. The AUD has now hit a 10 year low, slipping below 0.6800, while the NZD fell to 0.6535. The ramping up of the trade war, directly impacts the supply chain and the announcement of a US/EU deal on US beef does not assist the Australian Beef exports to Europe. Non Farm Payrolls in the US confirmed the strong domestic economy and reassures markets that the US has the power and resilience to weather the trade war.

This coming week will continue to be dominated by global trade wars and economic growth prospects. The RBA and RBNZ are meeting this coming week and are expected to confirm stimulative monetary policy, in an attempt to boost their respective economies. The Chinese continue to fight the US trade war with monetary stimulus, domestically. The ‘long game’ being employed by the patient Chinese administration, may prove to be extremely painful, so to have an authoritarian Government helps with the political fallout.

Catch the new look Collinson FX website at www.collinsonco.com

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: Dec 29 - More helicopter money
The helicopter money is coming thick and fast. Markets appreciated the fiscal stimulus The helicopter money is coming thick and fast. Markets appreciated the fiscal stimulus and equities rallied strongly. Posted on 28 Dec 2020
Collinson FX: Dec 3 - Australia on improve
Australian GDP jumped more than expected, 3.3% for the quarter and reduced the annualised contractio Australian GDP jumped more than expected, 3.3% for the quarter and reduced the annualised contraction to 3.8%. Posted on 3 Dec 2020
Collinson FX: Vaccine Rally stalls
Growth will continue to be challenged, as the recent European lock-downs, feed through to the data Growth will continue to be challenged, as the recent European lock-downs, feed through to the economic data. Posted on 18 Nov 2020
Collinson FX: Oct 19 - Election win anticipated
The election victory was anticipated by markets, but the magnitude of the victory was not. Labour won the NZ election in a landslide. The victory was anticipated by markets, but the magnitude of the victory was not. Posted on 19 Oct 2020
Collinson FX: Oct 14 - Drop expected post-Election
NZ House prices surged, due to lack of supply and cheap mortgages. Credit card spending surges NZ House prices surged, due to lack of supply and cheap mortgages, leading to a surge in credit card spending. The local election on Saturday should provide further downward pressures coming to bear. Posted on 14 Oct 2020
Collinson FX: Oct 6 - Oz tax cuts expected sooner
Australia is expected to bring forward tax cuts and other stimulus measures Equities opened the week strongly, after the shock hospitalisation of President Trump, last week and his subsequent recovery Posted on 6 Oct 2020
Collinson FX: Sept 18 - NZ in deep recession
NZ GDP data contracted 12.2% for the quarter, better than expected but confirming a deep recession. The Fed also assured markets that interest rates would remain at historical low levels, for years to come, encouraging investors. NZ GDP data contracted 12.2% for the quarter, better than expected but confirming a deep recession. Posted on 18 Sep 2020
Collinson FX: Sept 4 - US markets blow out
Australian trade data revealed a sharp increase in imports, accentuating a trade imbalance US Equity markets experienced a ‘blowout correction' overnight, lead by a crash in ‘stay-at-home' tech shares. This may a bit of a flash in the pan or, if extended, may become a significant market correction. Posted on 4 Sep 2020
Collinson FX: August 20 - China US election issue
The AUD fell back below 0.7200, while the NZD traded 0.6570, both being impacted by lock downs Maersk, the largest shipping company in the world, reported much better than expected earnings. This is a great sign for global trade, as the economic recovery progresses forward. Posted on 20 Aug 2020
Collinson FX: August 5 - Global equities climb
Australian downturn not as bad as expected, but Victorian lockdown has a ‘major impact' AUD trading up to 0.7150, while the NZD tests 0.6600 on the downside. RBA Governor said that the economic downturn was not as severe as originally feared, but warned the Victorian lockdown was having a ‘major impact'. Posted on 5 Aug 2020
MBW newsletters (top)