USD/CAD Fundamental Analysis April 17, 2012, Forecast

Analysis and Recommendations:

The USD/CAD remains above the parity level, the greenback is outshining the Looney, trading at 1.0022 holding close to the high for the day. In Canada there were a few eco data there was one eco data release, Foreign Securities Purchases, which surprised the markets by well exceeding the forecast.

Crude oil continued to show weakness which is a negative as Canada is a major exporter.

Overall the markets are waiting for Tuesdays Bank of Canada decisions and statements along with several other eco releases.

In the US today retail spending in the U.S. rose sharply for the third straight month, up 0.8% in March, as consumers continued to splurge on a wide range of goods and services. The Empire State index for April dropped markedly to a reading of 6.56 from 20.21 in March. Economists had anticipated a reading of 18.0.

Home-builder sentiment dropped in April for the first time in seven months, as growing traffic at new-build sites hasn’t yet led to sales. The National Association of Home Builders/Wells Fargo housing market index dropped 3 points.

Business inventories rose a seasonally adjusted 0.6% in February to $1.58 trillion, the Commerce Department reported Monday. Economists had forecast a 0.5% gain. The increase was led once again by the auto sector.

Economic Reports for April 16, 2012 actual v. forecast

 

GBP

 

 

 

Rightmove House Price Index (MoM) 

2.9%

 

 

 

1.6% 

 

 

 

JPY

 

 

 

BoJ Governor Shirakawa Speaks 

 

 

 

 

 

 

 

 

CHF

 

 

 

PPI (MoM) 

0.3%

 

0.5% 

 

0.8% 

 

 

 

USD

 

 

 

Core Retail Sales (MoM) 

0.8%

 

0.6% 

 

0.9% 

 

 

 

CAD

 

 

 

Foreign Securities Purchases 

12.50B

 

7.23B 

 

-4.28B 

   

 

USD

 

 

 

Retail Sales (MoM) 

0.8%

 

0.3% 

 

1.0% 

   

 

USD

 

 

 

NY Empire State Manufacturing Index 

6.6

 

18.0 

 

20.2 

 

 

 

USD

 

 

 

TIC Net Long-Term Transactions 

10.1B

 

41.3B 

 

102.4B 

   

 

Economic Events scheduled for April 17, 2012 that affect the Canadian and American Markets

13:30     USD      Building Permits                                                              0.71M                   0.71M    

Building Permits measures the change in the number of new building permits issued by the government. Building permits are a key indicator of demand in the housing market.    

13:30     USD      Housing Starts                                                                 0.70M                   0.70M  

Housing starts measures the change in the annualized number of new residential buildings that began construction during the reported month. It is a leading indicator of strength in the housing sector.   

13:30     CAD      Manufacturing Sales (MoM)                                                                      -0.90%

Manufacturing Sales measures the change in the overall value of sales made at the manufacturing level.             

14:00     CAD      Interest Rate Decision                                                   1.00%                    1.00%     

Bank of Canada (BOC) governing council members come to a consensus on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.    

14:15     USD      Industrial Production (MoM)                                          0.5%       

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

Government Bond Auctions (this week)

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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