USD/CAD Fundamental Analysis April 23, 2012, Forecast

Analysis and Recommendations:

The USD/CAD is trading at 0.9905 down since yesterday. The USD was trading over 1.0014 earlier in the week. Earlier this week the BoC held rates and gave a flat assessment of the Canadian economy. With the huge increase in crude oil prices today, there should be some strength to the Looney, but there was little to no response. Canada saw some mixed eco data today

Consumer price inflation in Canada rose less-than-expected last month, official data showed on Friday. In a report, Statistics Canada said that Canadian consumer price inflation rose to a seasonally adjusted 0.4%, from 0.4% in the preceding month. Analysts had expected Canadian consumer price inflation to rise 1.0% last month.

Several economic releases were negative for the CAD today, disappointing the markets was a  CPI coming in under forecast along with the monthly leading indicators report at 0.4% opposed to forecast of 1.0%

In the US, rising layoffs, falling home sales and slowing manufacturing activity are sparking fears that the economic recovery is headed for a springtime stall for the third year in a row has investors questioning the overall health of the US economy.

Economic Data for April 20, 2012 actual v. forecast

 

JPY

 

 

 

Tertiary Industry Activity Index (MoM) 

0.0%

 

0.8% 

 

-0.6% 

 

 

AUD

 

 

 

Import Price Index (QoQ) 

-1.2%

 

-1.0% 

 

2.5% 

 

 

 

EUR

 

 

 

German PPI (MoM) 

0.6%

 

0.4% 

 

0.4% 

 

 

 

EUR

 

 

 

German PPI (YoY) 

3.3%

 

3.1% 

 

3.2% 

 

 

 

EUR

 

 

 

German Ifo Business Climate Index 

109.9

 

109.5 

 

109.8 

 

 

 

EUR

 

 

 

German Current Assessment 

117.5

 

117.0 

 

117.4 

 

 

 

EUR

 

 

 

German Business Expectations 

102.7

 

102.5 

 

102.7 

 

 

 

GBP

 

 

 

Retail Sales (MoM) 

1.8%

 

0.5% 

 

-0.8% 

 

 

 

GBP

 

 

 

Retail Sales (YoY) 

3.3%

 

1.4% 

 

1.0% 

 

 

 

CAD

 

 

 

Core CPI (MoM) 

0.3%

 

 

 

0.4% 

 

 

 

CAD

 

 

 

CPI (MoM) 

0.4%

 

1.0% 

 

0.4% 

 

 

 

CAD

 

 

 

Leading Indicators (MoM) 

0.4%

 

1.0% 

 

0.7% 

   

 

CAD

 

 

 

CPI (YoY) 

1.9%

 

2.0% 

 

2.6% 

 

 

 

MXN

 

 

 

Mexican Unemployment Rate 

4.6%

 

4.9% 

 

5.3% 

   

Economic Events scheduled for April 23, 2012 that affect the Canadian and American Markets

As we move to the latter half of the middle of the month, there are no eco releases scheduled on Monday in the US or Canada. It should make for a quiet day.

Government Bond Auctions (this week)

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

In The Eyes of the Experts – 20/4/2012

What is this report?

In the morning the experts meet in the dealing room in order to prepare themselves for another trading day. They read the business press, and note relevant economic announcements expected during the day. They also consider the support and resistance lines and discuss the important rates in the major pairs; they indicate which pairs may strengthen and those which could weaken. Afterwards they wish everyone a successfully day of trading and turn on the computer screens…

Below you can find pairs the experts assume may be strengthen and weaken during the trading day; support and resistance lines relevant to the day’s trading and critical time for trading each day (important news etc.).

Currencies to watch for Long:

  • GBP
  • EUR
  • CHF

 

Currencies watch for Short:

  • JPY
  • NZD
  • AUD

 

Today’s important times (GMT+2):

  • 15:30 CAD

 

Important rates:

Pair R2 R1 Pivot S1 S2
EURUSD    1.3029    1.3085    1.3125     1.3182    1.3221   
GBPUSD 1.5978 1.6017 1.6047 1.6086 1.6116
USDJPY 81.06 81.33 81.53 81.80 82.01
USDCHF 0.9088 0.9116 0.9155 0.9183 0.9222
USDCAD 0.9844 0.9894 0.9928 0.9978 1.0012
AUDUSD 1.0271 1.0307 1.0348 1.0384 1.0426

 

CAD – Preview: CPI Data Important For Loonie Bias Post BOC

CAD – Preview: CPI Data Important For Loonie Bias Post BOC
CAD – Preview: CPI Data Important For Loonie Bias Post BOC
Release: Canada CPI m/m (Mar)

Consensus Forecast: 0.5%
Previous:
0.4%

Release: Core CPI m/m (Mar)
Consensus Forecast: 0.3%
Previous:
0.4%

Date/Time: 04/20/12 8:30AM EDT (12:30 GMT)

After Hawkish BOC Inflation Data Important for CAD Fundamental Bias?

The Canadian dollar got a huge boost from the Bank of Canada interest-rate statement which was more hawkish than expected, with the central bank expecting growth to be better than previously anticipated and with slacker excess capacity in the economy for inflation to be firmer than expected.

We can see this in the annual pace of CPI which has risen over the last two months after declining in the latter part of 2011.

On the month inflation is expected be rather strong with a 0.5% headline reading following the 0.4% in February, but the core rate is expected to come in at a cooler 0.3% rate after climbing 0.4% in February. Those types of monthly readings are certainly enough to keep the Bank of Canada concerned about price pressures.

However, when we consider annual prices, tomorrow’s data may actually put the BOC a bit at ease. The forecast for annual inflation is for prices to cool to 2.1% from February 2 .6%, with the core CPI expected to fall to 1.9% following the 2.3% reading in February. While the headline inflation rate will continue to be above the 2% target of the central bank, it should be encouraged that the core rate will fall below it.

Therefore, if the actual figures hit expectations we could actually further ease some of the recent strength in the Canadian dollar as it will contradict some of the hawkish language in the BOC statement.

However, and this is the most interesting case, if inflation prices wind up coming in stronger-than-expected, well then the central bank will continue to strike a hawkish tone going forward and we can take on a more bullish bias for the CAD.

The USD/CAD continues to be trapped within its almost 3-month long range, unable to build on its move in favor the CAD earlier in the week as a result of the BOC statement.

The pair currently moves back to test its 200-ema in the 4H timeframe near 0.9960. Therefore, as we find ourselves in the middle of our current trading range the inflation data can give us a rather clear trade idea.

A better-than-expected report could see the pair retest its lows from earlier in the week (0.9880) while a disappointing release – one that shows annual inflation muted – could see the pair trying to retest the parity level if not 1.0030.

USD/CAD Forecast April 20, 2012, Technical Analysis

 

USD/CAD rose on the session for Thursday as the oil markets were a bit soft, and the risk appetite in the general markets fell. The pair has recently been in massive consolidation, and the move on Thursday suggests that we are going to continue to be so. The parity level above should continue to keep the market down a bit, and this will be especially so as the 200 day EMA is just above it as well. The support level down at the 0.9850 level will continue to be supportive in the mean time. The pair needs to break below than in order to sell for any length of time, and it needs to break above the 1.01 level in order to buy and hold. In the meantime, we think this pair will continue to bounce between parity and 0.99 for short-term trades and that is exactly how we will trade this market. We are in the middle of that range right now, so we sit still until we approach the parity level in order to sell on the first sign of weakness. 

USD/CAD Forecast April 20, 2012, Technical Analysis
USD/CAD Forecast April 20, 2012, Technical Analysis

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

 

USD/CAD Forecast April 19, 2012, Technical Analysis

The USD/CAD pair had a bullish session on Wednesday as the oil markets fell for the day. The inventory number in the United States showed a larger build than expected, so oil fell in general. Because of the negative correlation in this pair at the oil market is well known, it isn’t a surprise that we got a bit of a jump. The 0.99 level also seems to be fairly supportive as well, and it now looks as if we are going to try and return to the back and forth motion of the previous consolidation. Because of this, we are slightly bullish for the next 50 pips or so – but would only be able to take a very small position as it is countertrend. 

USD/CAD Forecast April 19, 2012, Technical Analysis
USD/CAD Forecast April 19, 2012, Technical Analysis

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

In The Eyes of the Experts – 18/4/2012

What is this report?

In the morning the experts meet in the dealing room in order to prepare themselves for another trading day. They read the business press, and note relevant economic announcements expected during the day. They also consider the support and resistance lines and discuss the important rates in the major pairs; they indicate which pairs may strengthen and those which could weaken. Afterwards they wish everyone a successfully day of trading and turn on the computer screens…

Below you can find pairs the experts assume may be strengthen and weaken during the trading day; support and resistance lines relevant to the day’s trading and critical time for trading each day (important news etc.).

Currencies to watch for Long:

  • GBP
  • USD

 

Currencies watch for Short:

  • JPY
  • CHF
  • EUR

 

Today’s important times (GMT+2):

  • 17:30 18:15 CAD

 

Important rates:

Pair R2 R1 Pivot S1 S2
EURUSD    1.3049    1.3092    1.3131    1.3174    1.3213   
GBPUSD 1.5814 1.5876 1.5923 1.5984 1.6031
USDJPY 80.10 80.57 80.83 81.31 81.57
USDCHF 0.9092 0.9118 0.9149 0.9176 0.9207
USDCAD 0.9774 0.9832 0.9921 0.9978 1.0067
AUDUSD 1.0261 1.0332 1.0375 1.0446 1.0488

USD/CAD Forecast April 18, 2012, Technical Analysis

The USD/CAD pair fell rapidly on Tuesday as the Canadian dollar made massive gains for the session. The Bank of Canada came out with a semi-bullish monetary policy report for the month of January. The report suggested that the Europeans would emerge from recession in the second half of 2012, and the US would grow a bit stronger as well. Because of this, they expected the energy sector to do quite well over time.

The pair will often trade based upon the outlook for the US economy, seeing the Loonie appreciate when things are going well in America. This is mainly because of the fact that 80% of Canadian exports end up in the United States. It is a pair that serves as a barometer for the idea of a robust economy in America, and by extension the world.

However, as the pair fell apart during the Tuesday session, the bottom of the massive consolidation area has held again, and the pair bounced from the lows. The 0.9850 level has been strong lately, and it is worth noting that the pair managed to stop right at the bottom of that rectangle. With this being said, the pair is bearish, but is well supported at this area.

The bounce can be bought on supportive candles, even on a shorter timeframe chart. Four hour and even hourly charts can be beneficial to the timing of the trade. However, the parity level looks as if it is far too resistive to be broken to the upside for any real length of time. The 200 day EMA is just above that area, and as a result we think that it will continue to push the prices down in this market. The candle from the session on Tuesday is very long, but gave up0 quite a bit on the bounce late in the session.

However, the 0.9850 level now becomes more interesting. If the market falls below the 0.98 level, we could see a real move lower. However, as the bottom of the consolidation level has held so well over time, we believe the more likely scenario is a return to parity on the bounce and continuation of consolidation in this pair. 

USD/CAD Forecast April 18, 2012, Technical Analysis
USD/CAD Forecast April 18, 2012, Technical Analysis

USD/CAD Fundamental Analysis April 18, 2012, Forecast

Analysis and Recommendations:

The USD/CAD is trading at 0.9869 falling from the high of 1.0011 on news from the BoC.

The Bank of Canada announced Tuesday that it will keep its benchmark interest rate unchanged at 1%. The overnight lending rate has been kept at this level since September 2010. The bank said Canadian economic momentum is “slightly firmer”

Although U.S. builders start work on new homes at a sharply slower March pace, construction permits jump to their highest level in 3 1/2 years, data showed. Builders began construction on new U.S. homes at a slower pace in March, but permits jumped to the highest level since September 2008, the Commerce Department reported Tuesday. Housing starts fell 5.8% last month to an annual rate of 654,000.

Industrial production was unchanged for the second month running in March, the Federal Reserve said. Economists had forecast a 0.3% gain. While utilities output gained 1.5%, manufacturing output slipped 0.2%

The surprise today, came from the White House, the Obama administration proposed new measures Tuesday to limit speculation in the oil markets, seeking to draw a contrast with Republicans who have been calling for more domestic drilling during a time of near record gasoline prices.

Economic Reports April 17, 2012 actual v. forecast

Apr. 17

 

AUD

 

 

 

Monetary Policy Meeting Minutes 

 

 

 

 

 

 

 

 

 

JPY

 

 

 

Industrial Production (MoM) 

-1.6%

 

-1.2% 

 

-1.2% 

 

 

 

 

INR

 

 

 

Indian Interest Rate Decision 

8.00%

 

8.30% 

 

8.50% 

 

 

 

 

GBP

 

 

 

Core CPI (YoY) 

2.5%

 

2.4% 

 

2.4% 

 

 

 

 

GBP

 

 

 

CPI (YoY) 

3.5%

 

3.5% 

 

3.4% 

 

 

 

 

GBP

 

 

 

CPI (MoM) 

0.3%

 

0.3% 

 

0.6% 

 

 

 

 

EUR

 

 

 

CPI (YoY) 

2.7%

 

2.6% 

 

2.6% 

 

 

 

 

EUR

 

 

 

German ZEW Economic Sentiment 

23.4

 

20.0 

 

22.3 

 

 

 

 

EUR

 

 

 

ZEW Economic Sentiment 

13.1

 

10.7 

 

11.0 

 

 

 

 

EUR

 

 

 

Core CPI (YoY) 

1.6%

 

 

 

1.5% 

 

 

 

 

USD

 

 

 

Building Permits 

0.747M

 

0.710M 

 

0.715M 

 

 

 

 

USD

 

 

 

Housing Starts 

0.654M

 

0.705M 

 

0.694M 

   

 

 

CAD

 

 

 

Manufacturing Sales (MoM) 

-0.30%

 

-1.00% 

 

-1.30% 

   

 

 

EUR

 

 

 

ECB President Draghi Speaks 

 

 

 

 

 

 

 

 

 

CAD

 

 

 

Interest Rate Decision 

1.00%

 

1.00% 

 

1.00% 

 

 

 

 

USD

 

 

 

Industrial Production (MoM) 

0.0%

 

0.3% 

 

0.0% 

   

 

Economic Events scheduled for April 18, 2012 that affect the Canadian and American Markets

14:30:00               CAD       Bank of Canada Monetary Policy Report                                              

The Bank of Canada publishes a study of economic movements in Canada. It indicates a sign of new fiscal policy. Any changes in this report tend to affect the CAD volatility. If the BoC report shows a hawkish outlook, that is seen as positive (or bullish) for the CAD, while a dovish outlook is seen as negative (or bearish).

 

Government Bond Auctions (this week)

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

USD/CAD Forecast April 17, 2012, Technical Analysis

The USD/CAD pair rose during the session on Monday, poking through the parity level in order to challenge the 200 day EMA as well. This is an area that the pair has found resistive lately, and the level has acted as resistance yet again. The resulting shooting star on the daily candle suggests that the market wants to fall again. However, there is also the fact that the lows are getting higher and higher over time that has us concerned about selling. Because of the case for both moves – we are flat and think that we are back to waiting for more clear cut signs in this pair yet again. 

USD/CAD Forecast April 17, 2012, Technical Analysis
USD/CAD Forecast April 17, 2012, Technical Analysis

 

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

In The Eyes of the Experts – 16/4/2012

What is this report?

In the morning the experts meet in the dealing room in order to prepare themselves for another trading day. They read the business press, and note relevant economic announcements expected during the day. They also consider the support and resistance lines and discuss the important rates in the major pairs; they indicate which pairs may strengthen and those which could weaken. Afterwards they wish everyone a successfully day of trading and turn on the computer screens…

Below you can find pairs the experts assume may be strengthen and weaken during the trading day; support and resistance lines relevant to the day’s trading and critical time for trading each day (important news etc.).

Currencies to watch for Long:

  • AUD
  • GBP

 

Currencies watch for Short:

  • NZD
  • CHF
  • EUR

 

Today’s important times (GMT+2):

  • 15:30 USD
  • 16:00 USD

 

Important rates:

Pair R2 R1 Pivot S1 S2
EURUSD    1.2982    1.3028    1.3114    1.3159    1.3245   
GBPUSD 1.5755 1.5800 1.5854 1.5928 1.6012
USDJPY 80.67 80.86 81.02 81.21 81.37
USDCHF 0.9069 0.9133 0.9167 0.9231 0.9265
USDCAD 0.9902 0.9943 0.9965 1.0006 1.0028
AUDUSD 1.0297 1.0334 1.0392 1.0430 1.0488

USD/CAD Forecast April 16, 2012, Technical Analysis

The USD/CAD pair rose during the Friday session as the “risk off” attitude came roaring back to the markets. The pair continues to find the parity level as resistive, and the market has a resistance zone all the way up to the 1.01 handle. The 200 day EMA is just above, and as a result the move higher will be the hardest one to make.

Alternatively, this pair has support down at the 0.99 level, and this should continue to keep the market aloft. In fact, we see this market as a scalper’s playground, and will need to see one of these areas give way in order to be involved. 

USD/CAD Forecast April 16, 2012, Technical Analysis
USD/CAD Forecast April 16, 2012, Technical Analysis

USD/CAD Forecast for the Week of April 16, 2012, Technical Analysis

The USD/CAD pair rose during the week, but had a rough ride to get there. The market was back and forth, and we saw a lot of knee-jerk reactions to various issues. The oil markets and headlines out of Europe will continue to push this market around, so we will have to keep an eye on those areas to gauge whether or not this market should rise or fall. 

The parity to 1.01 levels is massively resistive, and should continue to fight the bulls. However, the 0.99 level below would be a support level we need to see broken in order to sell. The market should continue to be tight though, and as a result we are flat until one of these areas gets broken. 

USD/CAD Forecast for the Week of April 16, 2012, Technical Analysis
USD/CAD Forecast for the Week of April 16, 2012, Technical Analysis

USD/CAD Weekly Fundamental Analysis April 16-20, 2012, Forecast

Introduction: The Canadian Dollar moves in reaction to the US Dollar. Movements are small and easy to track and trade. The Canadian Dollar also responds to economic reports within Canada. It has little action against foreign currencies except during major moves or crisis.

The USD/CAD is the single biggest beneficiary of rising oil prices. Canada which is already the biggest exporter of oil to the US will experience a boost to its economy when oil price continue to increase. Therefore, if oil rises the Canadian dollar is likely to follow. Over the past years, the correlation between the Canadian dollar and oil prices has been approximately 81%. 

Analysis and Recommendation:

The USD/CAD closed the week at 0.9996 as the greenback picked up momentum as investors moved back to the safety of the USD after worries about Spain continued to surface. Friday also held disappointing news from China and the US.

Date

Last

Open

High

Low

Change %

04/13/2012

0.9996

0.9947

0.9996

0.9927

0.49%

04/12/2012

0.9948

1.0033

1.0037

0.9941

-0.85%

04/11/2012

1.0034

1.0049

1.0052

1.0009

-0.15%

04/10/2012

1.0049

0.9968

1.0050

0.9951

0.81%

04/09/2012

0.9968

0.9970

1.0002

0.9958

-0.02%

 

This could be a big week for Canada with possible implications for the currency and the Canada curve.  The Bank of Canada is widely expected to leave its key policy rate on hold in Tuesday’s rate statement, but it’s long anticipated Monetary Policy Report will shed additional light upon outstanding issues that remain to be addressed since the January MPR that was released prior to upward revisions to Q3 GDP growth and before we received Q4 GDP. 

After the Bank of Canada statement, Canadian data risk will be primarily focused upon the March CPI report.  February’s print showed accelerating headline inflation to 2.6% y/y but it isn’t clear whether this reverses a general downward trend in inflation from the 3.7% peak of last May that the Bank of Canada saw through.  The Bank of Canada uses core CPI as its operational guide while targeting headline CPI under the belief that the two measures converge upon one another over time but that headline is the more volatile of the two.  Thus, a general upward trend in core CPI to 2.3% is disconcerting,  but is keyed off  very weak year-ago base effects.  Going forward, we think the resetting of this base effect will lead to a flattening out in core and headline inflation. 

On the heels of disappointingly weak export figures, additional data risk could emanate from manufacturing shipments during February following the drop in the dollar value and volume of shipments in January that played a role in driving weak GDP growth of only 0.1% in January

 

Historical:

Highest: 1.0842 CAD on 01 Nov 2009.

Average: 1.0147 CAD over this period.

Lowest: 0.9435 CAD on 26 Jul 2011.

Economic Highlights of the coming week that affect the Canadian Dollar

Apr. 16 

13:30

 

CAD

 

 

 

Foreign Securities Purchases 

 

 

 

 

-4.19B 

 

 

Apr. 17

13:30

 

CAD

 

 

 

Manufacturing Sales (MoM) 

 

 

 

 

-0.90% 

 

 

 

14:00

 

CAD

 

 

 

Interest Rate Decision 

 

 

 

 

1.00% 

 

 

Apr. 20

12:00

 

CAD

 

 

 

Core CPI (MoM) 

 

 

 

 

0.4% 

 

 

 

12:00

 

CAD

 

 

 

CPI (MoM) 

 

 

 

 

0.4% 

 

 

 

13:30

 

CAD

 

 

 

Leading Indicators (MoM) 

 

 

 

 

0.6% 

 

 

 

 Economic Highlights of the coming week that affect the US Dollar

Apr. 16 

13:30

 

USD

 

 

 

Core Retail Sales (MoM) 

 

 

0.6% 

 

0.9% 

 

 

 

13:30

 

USD

 

 

 

Retail Sales (MoM) 

 

 

0.4% 

 

1.1% 

 

 

 

13:30

 

USD

 

 

 

NY Empire State Manufacturing Index 

 

 

21.1 

 

20.2 

 

 

 

14:00

 

USD

 

 

 

TIC Net Long-Term Transactions 

 

 

 

 

101.0B 

 

 

Apr. 17 

13:30

 

USD

 

 

 

Building Permits 

 

 

0.71M 

 

0.71M 

 

 

 

13:30

 

USD

 

 

 

Housing Starts 

 

 

0.70M 

 

0.70M 

 

 

 

14:15

 

USD

 

 

 

Industrial Production (MoM) 

 

 

0.5% 

 

 

   

 

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

USD/CAD Forecast April 13, 2012, Technical Analysis

 

The USD/CAD pair fell hard during the session on Thursday as the “risk on” trade came roaring into the markets. The pair has broken the bottom of a hammer from the Wednesday session, and as luck would have it – the highs from the Wednesday session wasn’t breaking – keeping us out of the long trade.

The close of the session for the Thursday market closed at the very lows for the day, and because of this it looks like the pair is ready to sell off some more. In fact, we are ready to sell if the lows for Thursday get broken. As for buying, this market suddenly looks as if it can be.

USD/CAD Forecast April 13, 2012, Technical Analysis
USD/CAD Forecast April 13, 2012, Technical Analysis

USD/CAD Fundamental Analysis April 13, 2012, Forecast

Analysis and Recommendations:

The USD/CAD is trading at 0.9967 dropping from 1.0039. The Canadian Trade Balance was reported well under forecast, surprising the markets. Economists had projected 2.0B and the figure was 0.3B. The Looney was weakened by this data.

On the other side of the border, the US Trade Balance was report well over forecast, but the USD lost when the unemployment numbers were released.

The number of Americans who filed requests for jobless benefits jumped by 13,000 last week to 380,000, the highest level since late January, the U.S. Labor Department said Thursday. Much of the increase in the week ended April 7 was related to spring break, when many school bus drivers and cafeteria workers are allowed to file claims. Claims from two weeks ago, however, were revised up to 367,000 from 357,000, an unusually sharp adjustment.

The U.S. trade deficit narrowed to $46 billion in February from $52.5 billion in January for a 12.4% drop, the largest percent decline since May 2009, the Commerce Department reported.

The number of foreclosure filings in March fell to their lowest level since July 2007, according to a report from RealtyTrac, released on today.

U.S. wholesale prices were unchanged in March as a recent surge in energy prices was mostly reversed, the Labor Department. Excluding the volatile categories of food and energy, core wholesale prices rose a seasonally adjusted 0.3

The economy isn’t strong enough on a sustained basis to make a big dent in the unemployment rate, said William Dudley, the president of the New York Fed, in a speech in Syracuse. He anticipated first-quarter gross domestic product growth of 2.25%, which is around the economy’s potential growth rate. 

Economic Reports April 12, 2012 actual v. forecast

 

AUD

 

 

 

Employment Change 

44.0K

 

6.0K 

 

-15.4K 

 

 

 

AUD

 

 

 

Unemployment Rate 

5.2%

 

5.3% 

 

5.2% 

 

 

 

EUR

 

 

 

French CPI (MoM) 

0.8%

 

0.6% 

 

0.4% 

 

 

 

INR

 

 

 

Indian Industrial Production (YoY) 

4.1%

 

6.6% 

 

1.1% 

   

 

SEK

 

 

 

Swedish CPI (YoY) 

1.5%

 

1.5% 

 

1.9% 

 

 

 

EUR

 

 

 

Dutch Retail Sales (YoY) 

0.90%

 

 

 

0.80% 

 

 

 

EUR

 

 

 

ECB Monthly Report 

 

 

 

 

 

 

 

 

GBP

 

 

 

Trade Balance 

-8.8B

 

-7.7B 

 

-7.9B 

   

 

EUR

 

 

 

Industrial Production (MoM) 

0.5%

 

-0.3% 

 

0.0% 

   

 

EUR

 

 

 

Portuguese CPI (MoM) 

1.20%

 

 

 

0.10% 

 

 

 

EUR

 

 

 

Greek Unemployment Rate 

21.80%

 

 

 

21.20% 

   

 

USD

 

 

 

Core PPI (MoM) 

0.3%

 

0.2% 

 

0.2% 

 

 

 

USD

 

 

 

PPI (MoM) 

0.0%

 

0.3% 

 

0.4% 

 

 

 

CAD

 

 

 

Trade Balance 

0.3B

 

2.0B 

 

2.0B 

   

 

USD

 

 

 

Trade Balance 

-46.0B

 

-52.0B 

 

-52.5B 

   

 

USD

 

 

 

Initial Jobless Claims 

380K

 

355K 

 

367K 

   

 

USD

 

 

 

Continuing Jobless Claims 

3251K

 

3335K 

 

3349K 

   

 

Economic Events for April 13, 2012

03:00     CNY      Chinese Fixed Asset Investment      20.8%                   21.5%

Chinese Fixed Asset Investment measures the change in the total spending on non-rural capital investments such as factories, roads, power grids, and property.                      

03:00     CNY       Chinese GDP (YoY)                              8.3%                      8.9%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

03:00     CNY       Chinese Industrial Production       11.5%                   11.4%     

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

03:00     CNY       Chinese Retail Sales (YoY)           15.0%                   14.7%   

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.     

07:00     EUR       German CPI (MoM)                         0.3%                      0.3%

The German Consumer Price Index (CPI) measures the changes in the price of goods and services purchased by consumers.

07:00     EUR       Finnish CPI (YoY)                                                         3.10%                   

Consumer Price index is the most frequently used indicator of inflation and reflect changes in the cost of acquiring a fixed bask of goods and services by the average consumer. The weights are usually derived from household expenditure surveys. From 1995 the weight structure is based on the European National Accounting System Classification of Individual Consumption by Purpose (COICOP).The consumer price index (CPI) is a measure of change over a specified period of time in the general level of prices of goods and services that a given population acquires, uses or pays for consumption. It compares a household’s cost for a specific basket of finished goods and services with the cost of the same basket during an earlier benchmark period.

09:30     GBP      PPI Input (MoM)                               1.2%                      2.1%

Producer Price Index (PPI) Input measures the change in the price of goods and raw materials purchased by manufacturers. The index is a leading indicator of consumer price inflation.

13:30     USD       Core CPI (MoM)                               0.2%                     0.1%

13:30     USD      CPI (MoM)                                          0.3%                      0.4%

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.                            

 14:55    USD      Michigan Consumer Sentiment   76.2                        76.2

The University of Michigan Consumer Sentiment Index rates the relative level of current and future economic conditions. There are two versions of this data released two weeks apart, preliminary and revised. The preliminary data tends to have a greater impact. The reading is compiled from a survey of around 500 consumers.

 18:00    USD       Fed Chairman Bernanke Speaks

Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to speak. As head of the Fed, which controls short term interest rates, he has more influence over the U.S. dollar’s value than any other person. Traders closely watch his speeches as they are often used to drop hints regarding future monetary policy

 

Government Bond Auctions (this week)

Apr 13  10:00  Belgium  OLO mini bond auction

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

 

Economic Indicators, Events and Market News Thursday April 12, 2012

As US markets begin to open, European markets are beginning to close and Asia is sleeping, lets take a quick look at the happening so far today.

The U.S. trade deficit narrowed to $46 billion in February from $52.5 billion in January for a 12.4% drop, the largest percent decline since May 2009, the Commerce Department reported.

The number of foreclosure filings in March fell to their lowest level since July 2007, according to a report from RealtyTrac, released on today.

U.S. wholesale prices were unchanged in March as a recent surge in energy prices was mostly reversed, the Labor Department. Excluding the volatile categories of food and energy, core wholesale prices rose a seasonally adjusted 0.3

The economy isn’t strong enough on a sustained basis to make a big dent in the unemployment rate, said William Dudley, the president of the New York Fed, in a speech in Syracuse. He anticipated first-quarter gross domestic product growth of 2.25%, which is around the economy’s potential growth rate. 

The number of Americans who filed requests for jobless benefits jumped by 13,000 last week to 380,000, the highest level since late January, the U.S. Labor Department said Thursday. Much of the increase in the week ended April 7 was related to spring break, when many school bus drivers and cafeteria workers are allowed to file claims. Claims from two weeks ago, however, were revised up to 367,000 from 357,000, an unusually sharp adjustment.

European equities moved slightly into the red following disappointing auction results out of Italy that further fanned concerns about the eurozone’s fiscal health.  Currency markets are not reflecting the mild pessimism that is being factored into European equities, as the USD is selling off against a fairly broad variety of crosses including a small rise in the Euro.  The A$ is the reigning champ of the day in response to a solid overnight jobs report. Dow futures are pointing to a lift at the 9:30amET open, and Treasuries are mostly flat with the 10 year issue trading at 2.04%.

Italy auctioned €4.88b of bonds. While market headlines are emphasizing that Italian 3-year bond yields increased compared to an auction last March, yields are actually lower than they were over the past two trading days, with the yield on the 3/1/2015 bond having fallen from 4.1% to 3.86%. While the bid-to-cover on smaller amounts of nearer-maturity bonds were low, auctions of longer maturity bonds (for instance a reopening of an 8/1/2023 bond) were better bid (bid-to-cover of 1.75) and their yields fell at auction (the yield on the 2023 bond was 5.81% two days ago, and is currently 5.55% according to Bloomberg). A comparable maturity Spanish bond is currently yielding 6.03%.

The European Central Bank reiterated that it can address upside risks to price stability in a “firm and timely manner.” It also said in the editorial to its Monthly Bulletin that inflation rates in the 17-nation currency bloc are likely to stay above 2% this year, with “upside risks” prevailing.

Industrial production across the 17-nation euro zone saw monthly growth of 0.5% in February and fell 1.8% compared to the same month last year, the European Union statistics agency Eurostat reported.

Spanish Prime Minister Mariano Rajoy reportedly said at a press conference on Thursday that his country will not need a bailout such as that was seen in Portugal, Ireland and Greece.

 Australia blew away expectations for job gains in March.  It gained 44k jobs versus consensus expectations for. 6.5k gain.  The A$ spiked about a half a US cent higher immediately following the report, and is up almost a full cent at the time of writing.

Much of the rise was in part-time jobs (+28k) but even just the full-time rise of 15.8k would have exceeded consensus expectations.  This may weigh against expectations for an RBA rate cut, but note that the RBA has signalled it is waiting for the next CPI report in any event, and that arrives only after next week’s rate decision.  Looking for a connection on commodity producers in the wake of Canada’s out-sized 82k job gain during the same month?  Not so fast.  Canada’s gains were skewed toward service industries, not natural resources, and overwhelmingly toward health care, information services, and the professional and scientific category

The UK had a fairly weak auction, selling £2.77b of paper maturing 6/7/2032 at an average yield of 3.01%. Bid-to-cover was 1.39.

The UK February trade deficit came in substantially wider than markets had forecast, growing to £3.4b compared to £2.5b last month (that £2.5b was itself £800m worse than the initially announced £1.7b January deficit). The upshot is that trade will probably drag on UK GDP during Q1 2012. The drop-off was largely attributable to weak exports while imports were fairly flat. The base-effect drop-off in automotive exports was a major factor.

French CPI for March was released overnight and came in higher than markets had anticipated but in line with Scotia’s 0.8% m/m forecast. The gain was focused on the ‘clothing and shoes’ category, which was up a very large 11.7% m/m. earlier in April. Energy prices were up as well.