Collinson FX: Mar 28: Trump's hardline delivers
by Collinson FX 28 Mar 2018 13:07 BST
29 March 2018
Day 2, Bay of Islands Sailing Week, January 25, 2018 © Richard Gladwell
Collinson FX: Mar 28: Trump's hardline delivers
US equity markets roared back, to begin the trading week, as fears of a global trade wars subsided. Markets consolidated in overnight trade, after Trumps hardline stance on trade policy, appeared to be working. China has agreed to open their markets to US exports and work toward addressing the massive trade deficit. The US have also shown flexibility on enforcements of announced trade policy. The equity markets have regained some mojo and the US Dollar has also rebounded. The EUR dropped back to 1.2400, unsettled by the continued lack of consumer and economic confidence, while the Yen traded 105.50.
US economic data has come off the boil, with House Prices drifting, while Consumer Confidence consolidated. The Tech sector continues to be shaken by the fallout surrounding the Facebook scandal. The harvesting of data from Facebook, for commercial and political purposes, has shaken the consumer and legislators. Facebook creator and leader, Mark Zuckerberg, has apologised and been summonsed to appear before Congress. It looks as if Government regulation is coming which will impact the tech sector.
The relief markets have demonstrated, this week, has translated in to commodity demand and the associated currencies. The NZD has looked to regain 0.7300, although the resurgent reserve has dampened the quest, while the AUD slipped back below 0.7700.
Trade and Tech controversies have dominated a week in which Central Banks have taken a back seat. Economic data will necessarily lead to speculation on the state of individual economies and thus monetary policy actions and commentary. Fiscal policy is of considerable consequence, but most countries have all but abrogated responsible positions, forcing Central Banks to centre stage.
Collinson FX: Mar 27: Trade war fears ease
US Equity markets surged back into positive territory, as fears of a trade war subside, sparking a global relief rally in equities. The Chinese have indicated they will address the trade imbalance, increasing semi-conductor purchases. Meanwhile, US and Chinese officials work to improve access to Chinese markets. Asian markets regained momentum, after news of a waver for South Korea, from the steel tariffs.
US Economic data was mixed, with a rise in the Chicago Fed National Activity, while the Dallas Fed Manufacturing contracted. Meanwhile, French GDP consolidated gains, holding around 2.5%, reaffirming recent European gains. The EUR jumped to 1.2450, while the Yen moved back to 105.00, releasing pressure on the Dollar.
Governor Adrian Orr assumes his role as the new leader of the RBNZ, which promises to be extremely challenging, as Central Banks face questions of a return to normalised monetary policy. He is by, all accounts, an impressive individual with wide experience in the private sector. The NZD is undergoing a renaissance, approaching 0.7300, while the AUD consolidates above 0.7700.
Collinson FX: Mar 26: Trump opens trade war
Equity markets continued to unwind under the threat of global trade wars. The Trump administration has announced the imposition of tariffs of up to $60 Billion on Chinese trade. This is the opening salvo on negotiations designed to curtail Chinese theft of 'intellectual property' and address the massive trade imbalance. China has responded with retaliatory tariffs but they can only lose this war.
They have an enormous trade surplus with the USA and 'free trade' has allowed this to flourish. Chinese markets have been protected by their own tariffs/trade restrictions, impeding trade partners, while taking advantage on free markets in the US. Command economies have worked well, as Asian Tigers have demonstrated, but challenges are here. Free Trade is transitioning to 'fair trade' and reciprocity!
The Dollar has suffered, with the EUR jumping to 1.2350, while the Yen has hit 104.50! This is a temporary reaction to 'trade wars' and the Feds activities should ensure the continued performance of a strong Dollar. The Central Banks that have been mired in the previous monetary cycle, should perform accordingly. The ECB, RBA, RBNZ and BoJ continue with QE, supporting vulnerable economies, thereby undermining their currencies. The NZD will open the week above 0.7200, while the AUD remains vulnerable, drifting below 0.7700.
Easter arrives this coming week so a shortened trading week should provide plenty of action.
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
For more on Collinson FX the latest update click here now
Countries: | NZ: 0800 338 838 | AU: 1800 143 415 | NY: 1888 6257 833 | UK: 0800 0285 834 |