Please select your home edition
Edition
Collinson and Co

Collinson FX Market Commentary- May 14, 2014 - US Equities fly high

by Collinson FX on 14 May 2014
Day 5, 2014 Toyota Optimist Championships, Manly SC © Richard Gladwell www.photosport.co.nz

Collinson FX market Commentary: May 14, 2014

http://itunes.apple.com/app/collinsonfx/id533360650?mt=8!Click_here to find out how to get CollinsonFX's free iPhone app

US Equities continued to break new records, spurred by a review upwards of March Retail Sales, to 1.5%. April Sales missed expectations but still managed to eke out a gain. This was enough to push the markets to record highs and push the Dollar higher. The EUR slipped back to 1.3700 and the GBP 1.6825. EU ZEW Economic Sentiment, reported higher confidence, rising from 59.5 to 62.1.

This was tempered by the massive fall in the all-important German ZEW Economic Sentiment report, which fell from 43.2, to 33.1. The long awaited and much anticipated Australian Budget was released overnight. This was the mother of all budgets in an attempt to combat exploding deficits and debt. The Treasurer succeeded and in the process probably hit most voters. The Liberals have curbed middle class welfare and indexed pensions. They have lifted petrol tax and added a co-payment on medicare.

They have hit the higher echelons of taxpayers with a three year levy. This has bent the debt curve and looks likely to result in a believable surplus in the coming years. The anticipation is now over and markets said it all, with the AUD unmoved, trading around 0.9350.

The media can now move on from their obsession and look for new targets! The constipation of the economy has now been cleared and a surge in economic activity may now be on the cards. NZ Markets will listen closely to the RBNZ Governor extol the virtues of rising interest rates and malign the confounded NZD.


Collinson FX market Commentary: May 13, 2014

Equities surged to new record highs in the US, surfing a wave of confidence, lead by the Tech sector. Equities have shown recent strength, supported by Central Bank actions and commentary, and buoyant corporate earnings.

The Geo-Political situation in the Eastern Ukraine has reduced pressure on markets, although Russia recognised the hugely successful independence referendums, leaving the door open for future support. Currencies were steady with the EUR trading 1.3750 and the GBP 1.6860. US markets will be focused on the all important consumer, with the release of Retail Sales tonight, which is a major driver in the economy.

Australian markets have been pre-occupied with the intensely speculated first Liberal Budget, which comes to a welcome end, with the release today. The impact on markets may be quite positive, due to the extensive negatives anticipated, that may be relieved with the revelations. The AUD trades around 0.9350 and may be a litmus for the market's perceptions.

NZ Home Sales fell 20.2%, although prices held up, which is the desired result recent of RBNZ interest rate rises. Sustained movement will be driven by demand and supply and not Wheeler. The KIWI remained steady, trading just above 0.8600, which may be the beneficiary of the rising attraction of the carry trade.

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.

Collinson and Co

Related Articles

Collinson FX Market Commentary - Aug 10 - NZD does a weird rally
he AUD breaching 0.7700, while the NZD moves towards 0.7200. The NZD is rallying ahead of the RBNZ interest rate decision which confounds many as a cut in interest rates is expected. The rate is expected to be cut by to 2%, but this may be too little, too late. The RBA cut rates and the currency has rebounded strongly as interest differentials still prove attractive.
Posted on 11 Aug
Collinson FX Market Commentary - June 11 - A Canary in the Mineshaft
Commodity currency gains were undermined on Fridays trade, AUD falling back to 0.7380, while the NZD fell to 0.7050! The RBNZ had a bad case of inertia, fuelling rallies in the currency, but the macro picture remains the underlying power. Take note of global bond markets, which are the canary in the mineshaft, with 10 year Bond around zero and the 10 year Japanese bond negative!
Posted on 11 Jun
Collinson FX Market Commentary - June 10 - Kiwi in hot pursuit of AUD
The RBNZ left rates unchanged with an ease bias remaining. The KIWI surged on the news, to record highs for the year The NZD jumped a big figure on the news, to trade 0.7130, consolidating in global markets overnight. There were gains against most of the cross rates, while the AUD managed to trade 0.7440, only incremental higher.
Posted on 11 Jun
Collinson FX Market Commentary - June 9 - Kiwi chasing down AUD
The AUD pushed up to 0.7470, while the NZD broke above the big, big figure of 0.7000! The KIWI moved north despite weaker local manufacturing data and ahead of the RBNZ rate decision. The Central Bank will be sorely tempted to combat the rising currency with rate cuts, but will probably rely on rhetoric and the forlorn hope of a US rate hike.
Posted on 10 Jun
Collinson FX Market Commentary - June 8 - Antipodean storm surge
The NZD has also been dragged along by antipodean confidence, moving to 0.6950, encouraged by a falling reserve. The RBA left rates unchanged, despite temptation, with a neutral bias. The surging currency, rising to 0.7450, is being put in the hands of a Fed rate rise. The NZD has also been dragged along by antipodean confidence, moving to 0.6950, encouraged by a falling reserve.
Posted on 8 Jun
Collinson FX Market Commentary - June 4 - Low jobs cripples USD
AUD spiked to 0.7360, while the NZD hit 0.6950! Non Farm Payroll added 38,000 jobs, which is the worst in more than 5 years, but the Unemployment number fell to 4.7%!? The commodity currencies took full advantage of the crippled Dollar, with the AUD spiking to 0.7360, while the NZD hit 0.6950!
Posted on 6 Jun
Collinson FX Market Commentary - June 2 - AUD give up gains
The AUD gave up much of the previous days gains, falling to 0.7220, after falling Retail Sales contradicted GDP numbers The AUD gave up much of the previous days gains, falling to 0.7220, after falling Retail Sales contradicted GDP numbers. The NZD tested 0.6800, on the downside, hit by negative sentiment rather than any economic event. All eyes remain on the Non Farm Payrolls in the US tonight.
Posted on 2 Jun
Collinson FX Market Commentary - June 1 - AUD regains some mojo
The AUD regained some mojo, pushing back to 0.7225, after a jump in export data. The NZD surged towards 0.6750, after a jump in Building Permits, but little should be read into housing data. The Australian story is more positive but it is all relative! It is performing better than most other OECD countries, but has serious fiscal and monetary issues, due to political incompetence.
Posted on 2 Jun
Collinson FX Market Commentary - May 31 - All quiet on Memorial Day
Markets were quiet, as the US celebrated the Memorial Day holiday, taking a long weekend along with the UK. Commodity currencies traded in a range, with the NZD testing 0.6700, while the AUD failed to regain 0.7200. Further rate cuts by the RBA or RBNZ seem unlikely considering the pending threats to raise rates by the Fed. Central Banks remain the major driver of equity and currency markets, although economic data will influence daily moves, as will be seen for the remainder of the week.
Posted on 31 May
Collinson FX Market Commentary - May 28 - US to raise interest rates?
Yellen confirmed that it would 'probably be appropriate' to raise interest rates in the near future with a proviso! The Dollar did stage a recovery, as the EUR moved to 1.1110, while the JPY broke back to 110.30. The rise in the reserve was reflected in the commodity currencies, with the AUD falling below 0.7200, while the NZD tests 0.6700 to the downside. The coming week provides an avalanche of economic data which will probably provide cover for the Fed!
Posted on 30 May