Collinson FX Market Commentary- May 14, 2014 - US Equities fly high
by Collinson FX on 14 May 2014
Collinson FX market Commentary: May 14, 2014
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Day 5, 2014 Toyota Optimist Championships, Manly SC © Richard Gladwell www.photosport.co.nz
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.
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