USD/CAD Fundamental Analysis April 16, 2012, Forecast

Analysis and Recommendations:

The USD/CAD is trading at 0.9975 midsessions. The greenback has gained strength against most of its trading partners all day, on fairly negative data from China, increased worries in the EU and a drop in the price of oil.

The most important near‐term driver is the Bank of Canada meeting on Tuesday April 17th. Data continues to be uneven (strong employment, solid housing starts but weak international merchandise trade), but is generally supportive of an underlying economy that is growing.

Canada’s southern neighbors produced some lackluster data today.

The cost of living rose again in March even as the price of gasoline leveled off, the U.S. government reported Friday.

The consumer price index climbed 0.3% last month as the cost of most goods and services rose, the Labor Department said. The increase outstripped the rise in wages, so inflation-adjusted earnings for the average American worker fell 0.1% last month.

Economists expected a 0.2% increase in the cost of living.

Consumer sentiment defies economists’ expectations in early April, easing on worries about current conditions, according to the University of Michigan/Thomson Reuters.

But the overall money flow has been pushing the USD upwards as investors moved to safety. Equities tumbled along with commodities.

Economic Reports for April 13, 2012 actual v. forecast

 

JPY

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

CNY

 

 

 

Chinese Fixed Asset Investment (YoY) 

20.9%

 

20.8% 

 

21.5% 

 

 

 

CNY

 

 

 

Chinese GDP (YoY) 

8.1%

 

8.3% 

 

8.9% 

 

 

 

CNY

 

 

 

Chinese Industrial Production (YoY) 

11.9%

 

11.5% 

 

11.4% 

 

 

 

CNY

 

 

 

Chinese Retail Sales (YoY) 

15.2%

 

15.0% 

 

14.7% 

 

 

 

EUR

 

 

 

German CPI (MoM) 

0.3%

 

0.3% 

 

0.3% 

 

 

 

EUR

 

 

 

Finnish CPI (YoY) 

2.90%

 

 

 

3.10% 

 

 

 

GBP

 

 

 

PPI Input (MoM) 

1.9%

 

1.2% 

 

2.5% 

   

 

USD

 

 

 

Core CPI (MoM) 

0.2%

 

0.2% 

 

0.1% 

 

 

 

USD

 

 

 

CPI (MoM) 

0.3%

 

0.3% 

 

0.4% 

 

 

 

Economic Events for April 16, 2012

08:15     CHF       PPI (MoM)                                                                        0.5%                      0.8%       

The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, which accounts for the majority of overall inflation.     

13:30     USD      Core Retail Sales (MoM)                                                0.6%                      0.9%

Core Retail Sales measures the change in the total value of sales at the retail level in the U.S., excluding automobiles. It is an important indicator of consumer spending and is also considered as a pace indicator for the U.S. economy.   

13:30     CAD      Foreign Securities Purchases                                                                   -4.19B    

Foreign Securities Purchases measures the overall value of domestic stocks, bonds, and money-market assets purchased by foreign investors.

13:30     USD      Retail Sales (MoM)                                                         0.4%                      1.1%

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.

13:30     USD      NY Empire State Manufacturing Index                      21.1                       20.2

The Empire State Manufacturing Index rates the relative level of general business conditions New York state. A level above 0.0 indicates improving conditions, below indicates worsening

Government Bond Auctions (this week)

Apr 16-30 n/a  UK Re-opened 3.75% 2052 Conventional Gilt syndication

Apr 16  09:10  Slovakia  Auctions floating rate Nov 2016 & 4.35% Oct 2025 & Bonds

Apr 16  09:10  Norway  T-bill auction

Apr 17  08:30  Spain  12 & 18M T-bill auction

Apr 17  09:30  Belgium  Auctions 3 & 12M T-bills

Apr 18  09:10  Sweden  Nominal bond auction

Apr 18  09:30  Germany  Eur 5.0bn 0.25% Mar 2014 Schatz

Apr 18  14:30  Sweden  Details T-bill auction on Apr 25

Apr 19  08:30  Spain  Obligacion auction

Apr 19  08:50  France  BTAN auction

Apr 19  09:30  UK  Auctions 0.125% I/L Gilt 2029

Apr 19  09:50  France  OATi auction

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