Collinson Forex Daily Market Commentary

Daily Market Commentary 

The big fiscal announcement from the Chinese Finance Minister, boosted equity markets and stabilised uncertainty that has been permeating the markets, for more than a week. The 'Finance Minister' talked a big game, noting that China had a 'rather large space' to increase the deficit, with reference to increased fiscal stimulus. This was enough to stabilise markets, despite the release of weak economic data confirming the need for assistance. Chinese CPI remains deflationary, while export growth has slumped, in the recent data. This will all play out as the stimulation package is rolled out. US markets were quiet overnight for the Columbus Day holiday, although equities rallied to record highs, while the bond market remained closed. The US Dollar remains in favour, with the EUR slipping back to 1.0900, while the GBP fell to 1.3070.

The stronger reserve pushed the NZD back to 0.6070, while the AUD dropped to 0.6700. Markets will digest the troubles in China and the proposed solutions, while looking closely at Central Bank monetary policy. There are many risks looming, including the US Election, the Middle East war and these are being reflected in bond markets.

Paul Bettany   I   Collinson Forex Limited    Collinson & Co.  

Private Banking   I   Mobile +64 0406-744-923  

Countries: NZ  0800 338 838 I AU  1800 143 415 I UK 0800 028 5834 I US 1888 625 7833