Collinson FX Market Commentary - Oct 13- It's the US economy, Stupid!

by Collinson FX on 14 Oct 2016

Auckland On The Water Boat Show - Day 3 - October 1, 2016 - Viaduct Events Centre Richard Gladwell www.photosport.co.nz

Collinson FX Market Commentary - Oct 13 - It's the US economy, Stupid!

Oct 13 - The Fed minutes revealed conflict and disagreement amongst members. The prevailing view was to leave rates unchanged, while the advocates for a rate rise believe it would be better now and slowly, rather than being forced on to an aggressive rate rise course in the future.

Employment is now under control, in the view of the Fed, while growth remains the major concern. Current US GDP growth is a depressing 1%, with all reviews on the downside, reflecting the parlous state of the economy. The Fed telegraphed four rate rises this year and none have eventuated so it is hard to believe the rhetoric.

This is October and Presidential elections fast approach, so expect October surprises, most of which are negative! The EUR continued to lose ground, falling to 1.1000, while the GBP stabilised on lows above 1.2200. The AUD has ceded 0.7600, now trading 0.7560, while the KIWI tried to build a firewall above 0.7000.

Auckland On The Water Boat Show - Day 3 - October 2, 2016 - Steinlager 2 © Richard Gladwell www.photosport.co.nz

Collinson FX Market Commentary - Oct 12- Light week grinds idle minds

Oct 12 - Equity markets consumed the lack of substantial economic data releases by speculating on the Feds coming actions. German and EU ZEW Sentiment reports came in stronger than expected, but contradict most other economic data coming from the challenged single market, allowing markets to delve in to the realm of contemplation.

The Fed have indicated a penchant for a number of rate rises this year and only enacted a token offering. It is now considered that a post-Presidential election rise is a live option for December. This hit equities and boosted the Dollar.

The EUR slipped to 1.1050, while the GBP tested new lows, falling to 1.2200. Commodity currencies were not immune, with the AUD dipping to 0.7540, while the NZD dipped to 0.7050. A light economic data week allows diversion and musing over Central Bank perceived actions.

- Auckland On The Water Boat Show - Day 4 - October 3, 2016 - Viaduct Events Centre - Sailing....Have a Go © Richard Gladwell www.photosport.co.nz

Collinson FX Market Commentary - Oct 11 - Oil surges on Russian deal

Oct 11 - US Equities gained ground overnight with little on the economic front to dampen enthusiasm. Oil prices surged to $51/barrel after President Putin confirmed collusion on a global cap on production with the OPEC cartel. German Trade data continued to show resilience with both Exports and Imports showing healthy gains.

The crippled EUR is a silver bullet for the German export-led economy, providing a serious advantage to a askew trade market, at the expense of less inclined trade members. The EUR fell to 1.1150, while the GBP tests new lows, trading 1.2380.

The rising reserve highlighted the recent weakness in the NZ Dollar, pushing the KIWI back to 0.7120, while the AUD held above 0.7600. The trans-tasman cross rate in now coming back towards reality levels. A light week of global economic data release means markets are open to geo-political influence and Central Bank speculation.

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