USD/CAD Fundamental Analysis April 19, 2012, Forecast

Analysis and Recommendations:

The USD/CAD is trading at 0.9907 as the USD gained strength again today. There was little in the way of supportive eco data on either side of the border. Spain and Italy are becoming the larger focal point and investors are returning to the USD.

The Canadian government said it will auction on Thursday C$3.8 billion (US$3.8 billion) of 7-day treasury bills. The bills will be dated and issued Thursday and will mature April 26. Tenders must be received no later than 10:30 a.m. EDT (1430 GMT) Thursday.

Bad debts held by Spanish banks rose to a fresh 17-year high in February, topping 8% for the first time since October 1994, as companies and households fell further behind on debt payments amid a deepening housing and economic slump.

According to data released Wednesday by the Bank of Spain, 8.16% of the loans held by banks, or EUR143.82 billion, were more than three months overdue for repayment in February, up from 7.91% in January.

The Italian government will delay its plan to reach a balanced budget in 2013 by a year due to a weaker economic outlook, Reuters reported Wednesday, citing a draft document expected to be approved by Prime Minister Mario Monti’s cabinet later.

The U.S. is very supportive of the move by Europe and other countries to boost the firepower of the International Monetary Fund to help alleviate any spillover from the European crisis, said Treasury Secretary Timothy Geithner.

Economic Reports for April 18, 2012 actual v. forecast

 

AUD

 

 

 

MI Leading Index (MoM) 

0.2%

 

 

 

0.6% 

 

 

 

EUR

 

 

 

Current Account 

-1.3B

 

5.0B 

 

3.7B 

   

 

EUR

 

 

 

Spanish House Price Index (YoY) 

-7.20%

 

-5.90% 

 

-6.80% 

 

 

 

GBP

 

 

 

Average Earnings Index +Bonus 

1.1%

 

1.3% 

 

1.3% 

   

 

GBP

 

 

 

Claimant Count Change 

3.6K

 

7.0K 

 

4.5K 

   

 

GBP

 

 

 

MPC Meeting Minutes 

 

 

 

 

 

 

 

 

GBP

 

 

 

Unemployment Rate 

8.3%

 

8.4% 

 

8.4% 

 

 

 

CHF

 

 

 

ZEW Expectations 

2.1

 

-8.0 

 

0.0 

 

 

 

EUR

 

 

 

German 2-Year Schatz Auction 

0.140%

 

 

 

0.310% 

 

 

 

EUR

 

 

 

Spanish Trade Balance 

-3.75B

 

-3.90B 

 

-3.65B 

 

 

 

USD

 

 

 

MBA Mortgage Applications  

6.9%

 

 

 

-2.4% 

 

 

 

USD

 

 

 

Crude Oil Inventories 

3.856M

 

1.363M 

 

2.791M 

 

 

 

CAD

 

 

 

BoC Monetary Policy Report 

 

 

 

 

 

 

 

 

USD

 

 

 

Gasoline Inventories 

-3.671M

 

-0.931M 

 

-4.277M 

 

 

 

Economic Events scheduled for April 19, 2012 that affect the European and American Markets

14:00:00               EUR        Consumer Confidence                  -19          -20.3

The Consumer Confidence released by the European Commission is a leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn. A high reading is seen as positive (or bullish) for the EUR, while a low reading is seen as negative (or bearish).

 14:00:00              USD       Existing Home Sales (MoM)       4.63M   4.59M

The Existing Home Sales, released by the National Association of Realtors provide an estimated value of housing market conditions. As the housing market is considered as a sensitive factor to the US economy, it generates some volatility for the USD. Generally speaking, a high reading is positive for the Dollar, while a low reading is negative.

 14:00:00              USD       Philadelphia Fed Man                   12.2        12.5

The Philadelphia Fed Survey is a spread index of manufacturing conditions (movements of manufacturing) within the Federal Reserve Bank of Philadelphia. This survey, served as an indicator of manufacturing sector trends, is interrelated with the ISM manufacturing Index (Institute for Supply Management) and the index of industrial production. It is also used as a forecast of The ISM Index. Generally, an above-the-expectations reading is seen as positive for the USD.

Government Bond Auction Schedule:

Apr 20  15:30  Italy   Details CTZ/BTPei on Apr 24 & BOT on Apr 26

Apr 23-27  n/a  UK  Re-opened 3.75% 2052 Conventional Gilt syndication (further details tba)

Apr 23  09:30  Germany  Eur 3.0bn new Apr 2013 (12M) Bubill

Apr 23  10:00  Belgium  OLO Auction cancelled

Apr 23  15:30  Italy   Details BTP/CCTeu on Apr 27

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

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