Collinsonfx Daily Market Commentary

Tuesday, October 8, 2019

Markets were quiet, to start a week, which could develop into one of speculation surrounding the US/China trade war. Negotiations between the Super-Powers begin again Thursday, with low expectations, although an interim agreement is a possibility. The dramatics going on in Washington has weakened President Trump's bargaining position and will probably incite the Chinese to defer any trade agreement. Trump has shown his displeasure at the Chinese reluctance to come to the party and has continually shown his ability to punish the Chinese. The stakes are extremely high!

German factory Orders contracted by 6.7% annually and the EU investor Confidence number collapsed, to minus 16.8! The European market is in dire straights and Brexit could possibly trigger a full blown recession. The EUR traded 109.70, while the GBP slipped below 1.2300. The Brexit date remains 31st of October. Local commodity currencies remain heavily trade dependent and will be driven by the US/China trade talks. The AUD trades 0.6730, while the NZD slipped below 0.6300, once again. A collapse of US/China trade talks would have a devastating impact on these currencies, who are now in dangerous technical territory.