Collinson FX Market Commentary: April 4, 2014: AUD and KIWI surge

Peter Burling, A-class catamaran World Championships, Day 2, Takapuna February 12, 2014

Collinson FX market Commentary: April 4, 2014

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Non-Farm Payrolls added 192,000 jobs but missed expectations and was lower than last month. This did little for equity markets, lead lower by the tech heavy NASDAQ, and followed by the remaining bourse. The close to the week was a depressing one, as Employment data is now such an intrinsic part of the Fed's policy making process, thus the market direction.

The news was not good for the Dollar, which lost ground against commodity currencies, with a weaker reserve measure.The AUD surged towards the 0.9300 level and the KIWI traded just below 0.8600.

The coming week will be highlighted by trade data from Asia, Europe and the US and will also look at inflationary pressures globally. When inflation does arrive it may have some vengeful momentum so emergence is closely monitored. Central Bank activity and commentary remain the major driver, influenced by global growth data, with a massive proviso for Geo-Political shocks.

A-class catamaran World Championships, Day 2, Takapuna February 12, 2014

Collinson FX market Commentary: April 3, 2014
Equity markets continued to test highs, with economic data supporting a slow global recovery, and the Fed pledging to fuel the liquidity bubble. Geo-Political threats from Europe subside and the focus is upon the economy.

In particular the US Economy, which has slowly awakened from an extended recession. Factory Orders increased 1.6%, beating expectations and the previous months number. The ADP Jobs reported private sector jobs improved by 191,000, setting up another strong Non-Farm payrolls on Friday.

The Dollar rebounded overnight with the positive economic data, pushing the GBP back to 1.6620 and the EUR to 1.3750. Bad news on the commodity front in NZ, in particular dairy prices, forced the KIWI down a cent to 0.8550.

The AUD continued to ride the wave of positive economic news holding 0.9240. All eyes will be on the Non-Farm Payrolls and in a prelude from the Challenger Job Cuts report. Markets will remain positive, save nasty surprises economically, or any deterioration in the Ukraine.

A-class catamaran World Championships, Day 3, Takapuna February 13, 2014

Collinson FX market Commentary: April 2, 2014
Equity markets continued to display optimism as fears over the Ukraine subside and economic activity continues to improve. Manufacturing reports from China, Europe and the US all point to slight improvements, which allow investors to surge ahead with equities. Yellen reinforced the Fed's intention to continue the extra-ordinary stimulus via Monetary Policy which provides ample liquidity.

The European markets also attempted to return to normal with steady Manufacturing PMI data and Unemployment (albeit extremely high!). The EUR tries to break 1.3800 with undue pressure on the Dollar. The US liquidity prevents any short term rally in the currency allowing some return to relative strength from opposites.

The commodity currencies are trading strongly with the KIWI 0.8650 and the AUD 0.9240. The RBA left rates unchanged yesterday, as expected, and provided little in the way of economic insight other than a slight uptick in Employment. Geo-Political events present the only real threat to bullish sentiment.

Blair Tuke (NZL) A-class catamaran World Championships, Day 3, Takapuna February 13, 2014

Collinson FX market Commentary: April 1, 2014
Equity markets surged to wipe out last weeks losses and confidence surged. European markets settled with assurances from Russia that invasion of the Ukraine was not anticipated. Russia has reached out to the West to settle things down and pocket gains already achieved in the Crimea.

There is a reason to doubt this, with up to 80,000 troops massing on the border and Russian expansionism, hardly sated. This is a chess game, timing is essential, a combination of wit and military force will prevail short-term. The EUR settled at 1.3770 and the GBP gained back to 1.6680. Yellen has endorsed tapering but also observed 'unprecedented monetary stimulus will continue for an extended period' to combat a slack labour market. Australian New Home Sales rose, ahead of the RBA rate decision today, which has continued to boost the currency.

The AUD broke back above 0.9250, with expectations of no action in interest rates, but a bias towards firming. The KIWI has continued to perform well, trading 0.8670, looking forward to important manufacturing data out in China, Europe and the USA. A big week for economic data releases although this could be overwhelmed by Geo-Political developments in the Ukraine.

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