Collinson Forex Daily Market Commentary

Daily Market Commentary

The Peoples Bank of China cut rates further, adding monetary stimulus to the economy, with more likely to follow. The Chinese Government are ramping up support for the economy, following assistance announced last week for the Real Estate sector, and despite the better-than-expected GDP growth number (+4.6%), released last week. This is a big week on a Geo-Political level and macro-economic level. The IMF meet for a week-long meeting, while even more importantly, BRICS meet. Major announcements are expected, in terms of new members and currency settlements, that will impact global markets. The Japanese election is also coming this week. US Bond Yields continue to push higher, belying the Fed's stated intentions, to cut rates further. This has supported a stronger US Dollar, with the GBP plunging back below 1.3000, while the EUR fell to 1.0820.

The rising reserve impacted commodity currencies, with the NZD falling to 0.6030, while the AUD dropped to 0.6660. Bond Yields tell us markets are not swallowing the Central Banks commitment to cutting rates. The Japanese election will have an impact, but will be overshadowed by BRICS and the looming US Presidential election.

Paul Bettany   I   Collinson Forex Limited    Collinson & Co.  

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