Collinson Forex Daily Market Commentary

Daily Market Commentary

Equity markets in Europe opened Q2 lower, following an extended Easter break, despite confirmation of tumbling inflation levels in Germany. German inflation fell to 2.2%, seemingly under control, but markets savaged equities as bond yields headed north. Manufacturing PMI data from Europe was extremely weak, operating deep in contraction territory, for an extended period of time. The cause of the inflation crises remains, high energy prices, supply and unprecedented deficits and debt. Oil prices are surging once again, surging over US$85/barrel, with the same constraints over supply in operation. The US Dollar was lacklustre, with the EUR trading 1.0750, while the GBP drifted to 1.2550.

The surge in oil prices and other commodity prices, offered hope to the commodity currencies, which remain under assault. The AUD managed to regain 0.6500, while the NZD looked to stabilise, trading around 0.5950. The heart of European and US economic woes remain, while the inflation tunnel vision appears to be widening, to incorporate wider economic problems.

PLEASE NOTE THE VIEWS EXPRESSED IN THIS COMMENTARY ARE THOSE OF THE AUTHOR AND NOT COLLINSON & CO

Paul Bettany   I   Collinson Forex Limited    Collinson & Co.  Private Banking   

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