Collinson FX market Commentary: May 1, 2014 Click here to find out how to get CollinsonFX's free iPhone app
Equities continued to recover, across the board, on a 'no news is good news' scenario. The Ukraine is simmering away and looks likely to go exactly as Putin planned. The West is on the back foot, although this has not prevented plenty of saber rattling, and tough talk has done little. Western powers have made an artform out of 21st Cenury Geo-Politics but good old fashioned expansionism has trumped and embarrassed them.
The US has constantly accused Russia of archaic tactics but has been beaten on all fronts. Russia will do what it wants and sends a strong message to other buffer states! US equities rose despite weak economic data. Weekly Mortgage Applications fell 5.9% and GDP growth failed miserably. The ADP Jobs reported some improvement in employment, which may be a positive, for the Non-Farm Payrolls Friday. The data did not instill confidence in the US and the Fed has continued to undermine the strength of the Dollar. The EUR rallied to 1.3875 and the GBP 1.6870 despite inherent and fundamental dysfunction.
The Asian economies are showing the way and appear even stronger when compared to Europe and the US. The 'rock star' economy, that is supposedly NZ, suffered a fall in business confidence and is likely to be impacted further by the dysfunctional monetary policy from a severely misguided and isolationist Reserve Bank Governor. The KIWI economy is a trade dependent economy and monetary policy must be managed with that in mind. This is not happening. RBNZ continues to raise interest rates, despite international Central Bank activity, confounding most pundits. Reaction should be the norm and not proactivity.
The NZD rose to 0.8620 and looks destined for new highs as the carry trade drags in investment. The AUD is still mired in budgetary speculation and will remain so until the release. The currency meanders below 0.9300 looking for direction. Non Farm Payroll numbers will be a point of debate but Geo-Political developments will overwhelm. Collinson FX market Commentary: April 30, 2014
Equities rebounded today with Geo-Political fears subsiding and more focus on the US economy. The Fed met today for their two day meeting and expectations were for a further reduction in QE Infinity as the US economy recovers. The US will focus on employment this week with the ADP and Challenger Jobs report out this week, culminating in Non-Farm Payrolls, Friday.
The EUR was steady at 1.3800 and the GBP 1.6825 buoyed by GDP growth of 3.1%. The UK economy is showing signs of a stronger recovery, devoid of much of the the negatives, in the EURO. EU Consumer Confidence remains in the doldrums, at minus 8.6, reflecting the dire situation the single market continues to operate in. The GFC revealed the extent of the Eurozones financial problems which remain. The deficits continue drowning the participant nations in a mountain of debt which will drive this deep recession/depression for the next decade. NZ Trade continued to improve with both Exports and Imports on the rise. This shows a healthy demand onshore and off.
The KIWI still holds 0.8560 caught in RBNZ irons. The RBNZ raises interest rates, boosting returns for the carry trade, then 'jawbones' the currency lower at every opportunity. The higher rates of return and the improving economy, will ultimately overwhelm the rhetoric, which may in turn destroy the nations international competitivesness.
The AUD is struggling around 0.9270 with a total domestic pre-occupation on speculation over the looming Federal budget. Look for Geo-Political events and Central Bank activity to drive currencies and equities, with economic data, a daily influence. Collinson FX market Commentary: April 29, 2014
Geo-Political developments worried markets, with tensions just below boiling point in the Ukraine. The Russians seem intent on destabilising the Ukraine, thus the unelected Government, in the lead up to elections. It is hard to these proceeding with the uncertainty engulfing the nation.
The US continues to talk and increase individual sanctions with little impact. All bark and no bite! This only serves to encourage US antagonists globally. Equities were mixed in a week of economic data releases highlighted by Growth and Jobs. The EUR pushed to 1.3850 and the GBP held 1.6800. Pending Homes Sales rose 3.4% for the month but remain heavily negative for the year.
Housing has been a major disappointment this year, considering the record low interest rates, thus the status of a leading indicator to the economy. The Dallas Fed Manufacturing Activity reported continued improvement in this sector emerging after the long hard winter.
The AUD traded steadily around 0,9250 in the lead up to the new Governments first budget. The KIWI was mixed, around 0.8520, with important trade data released today. This has been positive to date, in the rock star economy, but rising interest rates and currency will impact. For more on Collinson FX and market information see:
www.collinsonfx.com and www.collinsonwealthmanagement.com
Countries: | NZ: 0800 338 838 | AU: 1800 143 415 | NY: 1888 6257 833 | UK: 0800 0285 834 | 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.