USD/CAD Fundamental Analysis April 20, 2012, Forecast

Analysis and Recommendations:

The USD/CAD climbed a bit today. The dollar was able to put a bit of pressure on the Looney moving up to trade at 0.9928. There was little action here and an overall surprise as there were several disappointing numbers from the US today. Friday has a lot in store for this pair, perhaps investors are just preparing for the day ahead.

The number of Americans who filed requests for jobless benefits totaled 386,000 last week, keeping claims at a four-month high, the U.S. Labor Department said Thursday. Claims from two weeks ago were revised up to 388,000 from an initial reading of 380,000. Economists had projected claims would drop to a seasonally adjusted 374,000 in the week ended April 14, so the number is likely to disappoint investors. The average of new claims over the past four weeks, meanwhile, rose by 5,500 to 374,750, the highest level since late January. Continuing claims increased by 26,000 to a seasonally adjusted 3.3 million in the week ended April 7, the Labor Department said. 

Sales of existing homes fell 2.6% in March, the second monthly drop though the sales pace in the first quarter was the best in five years, according to data released Thursday. The National Association of Realtors said.

 A gradual improvement in U.S. economic growth is expected past the summer, the Conference Board said Thursday as it reported that its index of leading economic indicators increased 0.3% in March, led by the interest rate spread.

Manufacturing activity in the Philadelphia region grew at a slower pace in April, the Philadelphia Federal Reserve reported Thursday. The bank’s business condition index fell to 8.5 from 12.5 in March.

Economic Data for April 19, 2012 actual v. forecast

 

JPY

 

 

 

Trade Balance 

-0.62T

 

-0.43T 

 

-0.32T 

 

 

 

AUD

 

 

 

NAB Quarterly Business Confidence 

-1.00

 

 

 

1.00 

 

 

 

EUR

 

 

 

Dutch Unemployment Rate 

5.90%

 

6.00% 

 

5.90% 

   

 

EUR

 

 

 

Italian Industrial New Orders (MoM) 

-2.5%

 

-1.1% 

 

-7.7% 

   

 

EUR

 

 

 

Spanish 2-Year Auction 

3.463%

 

 

 

2.069% 

 

 

 

EUR

 

 

 

Spanish 10-Year Auction 

5.743%

 

 

 

5.338% 

 

 

 

EUR

 

 

 

French 2-Year BTAN Auction 

0.850%

 

 

 

0.700% 

 

 

 

EUR

 

 

 

French 3-Year BTAN Auction 

1.060%

 

 

 

1.090% 

 

 

 

EUR

 

 

 

French 5-Year BTAN Auction 

1.830%

 

 

 

1.780% 

 

 

 

PLN

 

 

 

Polish Industrial Output (YoY) 

0.70%

 

4.70% 

 

4.60% 

 

 

 

PLN

 

 

 

Polish PPI (YoY) 

4.50%

 

4.80% 

 

6.30% 

 

 

 

CAD

 

 

 

BoC Gov Carney Speaks 

 

 

 

 

 

 

 

 

USD

 

 

 

Initial Jobless Claims 

386K

 

370K 

 

388K 

   

 

USD

 

 

 

Continuing Jobless Claims 

3297K

 

3280K 

 

3271K 

   

 

USD

 

 

 

Bloomberg Consumer Confidence 

-31.4

 

 

 

-32.8 

 

 

 

Economic Events scheduled for April 20, 2012 that affect the Canadian and American Markets

12:30:00               CAD       Consumer Price Index (MoM)                                                   0.50%    0.40%

The Consumer Price Index released by the Statistics Canada is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchase power of CAD is dragged down by inflation. The Bank of Canada aims at an inflation range (1%-3%). Generally speaking, a high reading is seen as anticipatory of a rate hike and is positive (or bullish) for the CAD.

 12:30:00              CAD       Bank of Canada Consumer Price Index Core (MoM)        0.30%    0.40%

The Consumer Price Index Core is released by the Bank of Canada. “Core” CPI excludes fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products. These volatile core 8 are considered as the key indicator for inflation in Canada. Generally speaking, a high reading anticipates a hawkish attitude by the BoC, and that is said to be positive (or bullish) for the CAD.

 12:30:00              CAD       Bank of Canada Consumer Price Index Core (YoY)            1.90%    2.30%

Consumer Price Index Core is released by the Bank of Canada. “Core” CPI excludes fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products. These volatile core 8 are considered as the key indicator for inflation in Canada. Generally speaking, a high reading anticipates a hawkish attitude by the BoC, and that is said to be positive (or bullish) for the CAD.

 12:30:00              CAD       Consumer Price Index (YoY)                                                       2.00%    2.60%

The Consumer Price Index released by the Statistics Canada is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchase power of CAD is dragged down by inflation. The Bank of Canada aims at an inflation range (1%-3%). Generally speaking, a high reading is seen as anticipatory of a rate hike and is positive (or bullish) for the CAD.

 12:30:00              CAD       Leading Indicators (MoM)                                                           0.40%    0.60%

The Leading Indicators released by the Statistics Canada measures future trends of the overall economic activity including employment, average manufacturing workweek, initial claims, permits for new housing construction, stock prices and yield curve. It is considered as a measure for economic stability in Canada. Generally, a high reading is seen as positive (or bullish) for the CAD, whereas a low reading is seen as negative (or bearish).

 13:00:00                              G20 Meeting                    

The G20 meeting is a gathering of finance ministers and central bank governors from systematically important industrialized and emerging economies to discuss key issues in the global economy. Traders should pay close attention to this event as it might bring a new dimension to the markets.

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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