Please select your home edition
SW newsletters (top)

Collinson FX: Aug 21, 2019 - Boris on tour of Europe

by Collinson FX 20 Aug 14:20 PDT 21 August 2019

Collinson FX: August 21, 2019 - Boris on tour

Global equity markets were lower overnight, after big rebounds the previous trading day, with Geo-Politics dominating the narrative.

The Italian PM resigned, but the EUR held steady at 1.1095, as this had been telegraphed and the machinations will rumble through the process. Brexit developments dominated European markets, with the British PM Boris Johnson about to embark of a tour of Germany and France, in the lead in to the G7.

Boris Johnson has sent a detailed letter ruling out the 'Irish backstop'. European President Tusk has rejected this, out of hand, but the German Chancellor was much more conciliatory, which allowed the GBP to rebound to 1.2165.

PM Boris Johnson will embark on a huge week of negotiations, with key allies Merkel and Macron and he seems to have much brighter prospects than the previous hapless Prime Minister. Trump has supported the new PM.

The RBA released the minutes of their last meeting and the outlook for growth was 'firmer', although their were downside risks. Members would consider further easing of monetary policy if economic conditions deteriorated further. The AUD was enthused by the news, rallying to 0.6775, while the NZD drifted to 0.6415. Analysts are now predicting up to 5 rate cuts by the Fed and the bond market has reflected this. US/China trade developments have been positive but remains a constant drag on commodity based currencies.

Collinson FX: August 20, 2019 - Recession fears dismissed

Global equities rallied strongly, to open the week, after trade war fears and growth prospects were allayed. President Trump has dismissed fears of a looming recession and his key economic adviser, Larry Kudlow, reinforced this. The US consumer is spending and the economy continues to grow strongly.

The German Finance Minister, Olaf Sholz, announced Germany had a EUR$50 'fighting fund' to boost fiscal stimulus. This calmed fears about a recession in the European engine room. EU CPI contracted last month and the annual headline number has fallen to 1%. European growth is seriously challenged and the ECB is running out of monetary options, so fiscal stimulus will be needed. The EUR slipped below 1.1100, while the GBP has rallied to 1.2135, as Brexit approaches fast.

  The trade exposed commodity currencies continued to cede ground, with the AUD drifting to 0.6760, while the NZD looks to test 0.6400 on the downside. The US/China trade war and the Chinese supply chain are key to these currencies. The G7 coming up in France may be a grand stage to announce any progress on the trade front? Central Bank leaders gather in Jackson Hole for the latest edition of their annual conference. This will be addressed by the Fed Chairman Powell on Friday.

Collinson FX: August 19, 2019 - Respite after a testing week

Markets rallied to close out an extremely testing week of volatility. Equity markets collapsed after the US Bond Yield curve inverted, signalling a forthcoming recession, triggered by fears over global growth as a result of the US/China trade war. Bond Yields bounced on Friday, along with the equity markets, as confidence starts to recover.

The US economy remains strong, supported by the continued strong activity in the consumer sector, allaying global growth fears. Trump has deferred the implementation of the next tranche of tariffs, until December and announced US/China trade negotiations will resume next month.

  The AUD remained steady despite the volatility, trading 0.6775, while the NZD drifted back to 0.6420. These trade exposed currencies remain extremely vulnerable to developments on the US/China trade war. The GBP continued to regain ground, jumping to 1.2145, as Brexit activity heats up. This coming week will focus on growth and Central Bank speculation over monetary policy. The Federal Reserve holds the annual Jackson Hole Symposium later in the week and this will be headlined by Federal Reserve Chairman Powell on Friday.

  Markets will be looking for a breather with less volatility to calm investors anxiety.

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: Sept 13, 2019 - US heads for record
Trade exposed commodity currencies held recent gains - AUD trading 0.6865, NZD tries for .6400 Trump delayed the imposition of $250 Billion in tariffs on Chinese products, from 1st of October to the 15th of October, as an act of goodwill. This boosted US equities and they are now headed to new record highs. Posted on 12 Sep
Collinson FX: Sept 4: Shadow over equity markets
Equity markets remained under the trade war shadow, which was enlarged, after new tariffs imposed Equity markets remained under the trade war shadow, which was enlarged, after both China and the USA began the imposition of a new raft of tariffs. The move put the US share market went sharply into reverse. Posted on 3 Sep
Collinson FX: Aug 30: Confidence data kills Kiwi
The collapse of the NZD was triggered by the appalling Business Confidence number This did little to help the trade exposed currencies, as the stronger Dollar pushed the AUD back to 0.6720, while the NZD plunged to 0.6300! Posted on 30 Aug
Collinson FX: Aug 16 - US Markets rebound
US equity markets rebounded after the crash, the previous day, boosted by strong US domestic data. The AUD rallied back up to 0.6780, while the NZD languished around 0.6440, still extremely vulnerable. The Chinese released some conciliatory messages, regarding the prospects of a US/China trade deal Posted on 16 Aug
Collinson FX: Aug 7 - NZD weathers the storm
Reality is setting in and the NZD has returned to trade just above 0.6500, while the AUD has settled 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. Posted on 6 Aug
Collinson FX: Aug 2 - AUD hits 10yr low
The new tariff pushed the AUD to a 10 year low of 0.6800. The NZD slipped below 0.6550 The imposition of this massive tariff had an immediate and enormous impact on markets. Oil prices crashed, Gold spiked and US Bond Yields collapsed. Posted on 2 Aug
Collinson FX: May 27- US/China trade fears recede
AUD jumps to 0.6920, while the NZD spiked to 0.6550. NZ Business Confidence data, out Wednesday the 29th of May, will be a key driver in the local market, although US/China trade developments will remain the macro influence Posted on 26 May
Collinson FX: May 17 - AUD drops ahead of poll
The NZD traded down below 0.6550. AUD plunges below 0.6900 This prospect does not fill markets with confidence, reflected in the AUD unwinding in the lead up to Election Day which has plunged below 0.6900. Posted on 17 May
Collinson FX: May 6 - A perfect storm looms for Oz
There is a possibility of a rate cut by the RBNZ, but it is unlikely the RBA will act. The coming week has important Central Bank rate decisions from both the RBA and the RBNZ. They are both expected to be dovish, with recent weak growth data, driving expectations of continued generous monetary policy. Posted on 6 May
MBW newsletters (top)