USD/CAD Fundamental Analysis Jan. 23, 2012, Forecast

Economic Events: (GMT)

11:30 USD 3-Month Bill Auction

The figures displayed in the calendar represent the rate on the treasury bill auctioned. U.S. Treasury Bills have maturities of a few days to 52 weeks and are sold to institutional and individual investors through public auctions to finance the public debt. The rate on a Treasury bill represents the return an investor will receive by holding the bill its entire duration. All bidders receive the same rate at the highest accepted bid. Yield fluctuations should be monitored closely as an indicator of the government debt situation. Investors compare the average rate at auction to the rate at the previous auction of the same security and to an average of the past 10 to 12 auctions of that security.

08:30 CAD Leading Indicators (MoM)

The Leading Indicators Index is a composite index based on 10 economic indicators, that is designed to predict the future direction of the economy. The report tends to have a limited impact because most of the indicators used in the calculation are released previously.

A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.

Analysis and Recommendations:

The USD/CAD is currently trading 1.0141  +0.0032   (+0.32%)

The Canadian dollar weakens further after December’s much weaker CPI report. The US dollar is at C$1.0141, having traded briefly above C$1.0160 after the release. Crude Oil is also dropping in today’s trading which will weaken the Canadian Dollar. This might present an opportunity, as the USD seems to be gathering some strenght in afternoon trading.

Upcoming Govt Bond Sales Dates

Jan 23  10:10  Norway  Nok 6.0bn 4.25% May 2017 bond

Jan 23  10:10  Slovakia  Auctions Apr 2014 bond

Jan 23  10:30  Germany  Eur 3.0bn Jan 2013 Bubill

Jan 23  12:00  Norway  Details bond auction on Jan 30

Jan 24  09:30  Netherlands Eur 1.5-2.5bn Jan 2013 & Jan 2042 DSL

Jan 24  09:30  Spain  Auctions 3 & 6M T-bills

Jan 24  16:30  Italy   Details CTZ/BTPei on Jan 26 & BOT on Jan 27 &

Jan 24  18:00  US  Auctions 2Y Notes

Jan 25  10:10  Sweden  Nominal bond auction

Jan 25  10:30  Germany  Eur 3.0bn 3.25% Jul 2042 Bund

Jan 25  16:30  Italy   Details BTP/CCTeu on Jan 30

Jan 25  18:00  US  Auctions 5Y Notes

Jan 26  10:10  Italy   Auctions CTZ/BTPei

Jan 26  18:00  US  Auctions 7Y Notes

Jan 27  10:10  Italy   BOT auction

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