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Strong CAD retail sales indicative of a recovering consumer

Posted on: June 22, 2017

In the first of two big data releases this week Canadian Retail Sales smashed expectations at 0.8% compared to 0.3%. The current run from January to April matches the best YTD start ever for Canadian Retail Sales. Tomorrow is another big one with May CPI, can we finish the week with a one-two punch? If so, expect to see the chances of a July rate hike in Canada get another bump, as we went from 40% to 54% probability of a 0.75bp hike after the Retail Sales number.

Oil remains a thorn in the side of CAD dollar, although the support band above $42 is holding for now. Will be interesting to see what the Bank of Canada does if the data continues to run hot while oil slumps. Very strong Canadian retail sales data sent USDCAD from 1.3300 to trade to a bottom of 1.3250. Technically speaking, resistance remains up at 1.3340 near the 200-day and support comes in around 1.3220/30. With Canadian data out of the way, Fed commentary will now play a focus today and tomorrow, with FOMC members Powell (centrist), Mester (hawk) and Bullard (dove) all due to speak on the topic of US monetary policy and fostering economic growth.

Across the pond, the RBNZ left its cash rate unchanged at 1.75%, in line with expectations, and continuing to suggest that monetary policy will remain accommodative until late 2019. The statement downplayed strength in inflation despite recent strength in NZD, and the central bank noted that a weaker NZD is preferable to support export growth.

In other news, Warren Buffets Berkshire Hathaway has agreed to acquire $400 million of Home Capitals common shares and provide a $2 billion line of credit. While not entirely relevant on a currency front, this move will likely improve outsider sentiment on the health and sustainability of the Canadian housing market.

  • Yesterdays NA Range: 1.3273 – 1.3348
  • Asia Overnight Range: 1.3317 – 1.3336
  • London Overnight Range: 1.3249 – 1.3338

June 22, 2017

Strong CAD retail sales indicative of a recovering consumer

In the first of two big data releases this week Canadian Retail Sales smashed expectations at 0.8% compared to 0.3%.

June 21, 2017

WTI sends yields lower, risk aversion in early trading

Markets are on the defensive after WTI’s transition into bear market territory.

June 20, 2017

Dollar mixed against G10 peers, Brexit negotiations progress

Oil weakness is the catalyst in the Canadian dollar and Mexican Peso this morning.

June 19, 2017

Eyes on CAD for CPI & retail sales this week

Last week had its fair share of disappointing economic data, starting with weakness in US inflation.

June 16, 2017

Week ends off on Hawkish central banks

The BoJ closed the busy week of central bank decisions earlier this morning.

June 15, 2017

USD/CAD higher after Fed hike, BoE on hold

In response to the Fed sentiment yesterday, we’ve seen a risk-off approach in markets.

June 14, 2017

US CPI & retail sales disappoint ahead of FOMC meeting

Lots on the table for today in terms of economic data.

June 13, 2017

Wilkins boosts CAD; Oh Canada!

Canada’s in the spotlight after surprisingly hawkish comments on Monday from Bank of Canada’s Senior Deputy Governor Carolyn Wilkins.

June 12, 2017

Muted Monday ahead of Central Bank activity

It’s a relatively quiet morning on the desk in terms of data.

June 09, 2017

Hanging Parliament causes GBP to take a nose dive

Can we agree that people in the business of predicting things have had a rough 12 months?

June 07, 2017

USD mixed ahead of super Thursday

The DXY Index made fresh lows yesterday as the USD continued to trade heavy against many of its G10 counterparts.

June 05, 2017

Polls tighten ahead of UK election

We are coming down to the wire for the UK election and if some of the pollsters are to be believed the Labor Party, led by Jeremy Corbyn, has made up significant ground.

June 02, 2017

US non-farms disappoint

Ouch! Nothing redeeming about the US Employment report this morning.

May 31, 2017

Canadian GDP Numbers Mixed as Exports Decline and Imports Increase

A quite session yesterday as the US and the UK returned from their extended weekends.

May 26, 2017

Markets stall ahead of long weekend

The YouGov poll in UK showing a sharp decrease of the lead by the conservative party puts pressure on the GBPUSD.

May 23, 2017

Bank of Canada and OPEC meeting on deck

Tragedy struck in Manchester as 22 people were killed in a terrorist attack on Monday night.

May 17, 2017

Trump-Comey part deux

Risk sours amid reports that Trump asked former FBI Director Comey to end the FBI’s investigation into former White House national security advisor Michael Flynn’s connections with Russia.

May 15, 2017

Russia and Saudi extends oil cuts

Russia and Saudi agreed to extends oil production cuts until March 2018.

May 10, 2017

Market in slumber after French election

With the French election out of the way, the market is consolidating within its recent range looking for the next catalyst for directional bias.

May 08, 2017

Macron wins French election.

Macron decisively wins the French election last night with 66% of the vote vs Le Pen’s 34%.

May 05, 2017

June rate hike locked and loaded

USDCAD made fresh highs on Thursday as oil continued to slide away.

May 05, 2017

Financial Markets weekly newsletter

Another damp week after spectacular sunshine to start the year.

May 02, 2017

USDCAD approaches trend resistance ahead of Fed meeting tomorrow

The quiet start to the week continues, as participants are reluctant to step in front of significant event risk starting with the Fed announcement tomorrow.

May 01, 2017

Quiet start to currency markets as participants await FOMC/Payrolls

May has begun with a whisper in currency markets, as most of Europe and Asia are enjoying a bank holiday.

April 27, 2017

NAFTA Waffling whips around USDCAD as Trump makes tax announcement

Headline trading in full force over the past 24 hours, as USDCAD remained at the mercy of the Trump Administrations policies.

April 25, 2017

Trump administration talks tough on trade, hammering the loonie

It is clear that the phrase “no use crying over spilled milk” has not made it south of the border.

April 24, 2017

Macron and Le Pen move on in French election

Lively weekend in currency news, with the first round of the French election happening yesterday.

April 20, 2017

Macron increases lead on Le Pen in French polls

Yesterday USDCAD kept chugging along, ending the New York session around 1.3485.

April 19, 2017

May takes GBP on wild ride as she announces snap election

Did anyone catch the number of the GBP train yesterday? After announcing a surprise press conference yesterday, Theresa May caught the market off guard by announcing she would not be resigning as PM.

April 03, 2017

USDCAD remains range bound ahead of employment numbers

The USD is mixed against crosses to start the week this morning, gaining ground against AUD/NZD.

March 31, 2017

CAD strengthens as Canadian GDP comes in higher than expected

It looked like USDCAD might finally take a run at the post FOMC low of 1.3265 for a while yesterday.

March 29, 2017

USD bulls run again?

USD has been on its back foot since the beginning of March but it regained its footing yesterday.

March 28, 2017

Oil prices stabilize…for now

After seeing some interesting moves overnight yesterday, price action fizzled into the North America session. USDCAD tested support again at 1.3320 before taking another run at resistance as oil prices sold off to start the North American session.

March 24, 2017

Canadian CPI slows in February

Yesterday the theme was anticipation, as the market sat around on pins and needles and waited for Congress to vote on the Trumpcare bill.

March 23, 2017

Trumpcare vote takes centre stage

Yesterday the markets were in risk-off mode, with concerns about the ability of Republican leaders to successfully push the ACHA health care bill through the House.

March 22, 2017

Is the USD uptrend ending?

Canadian retail sales surprised to the upside coming in at 2.2% for January vs expectation of 1.5%.

March 21, 2017

Canadian retail sales stronger than expected

After a while you run out of descriptions for watching grass grow, so we will not spend much time recapping what happened (spoiler alert: not much) yesterday.

March 20, 2017

G20 proves uneventful, UK announces Brexit intentions

Another sleepy start to the trading week so far as participants return to the desks from the weekend without much to report.

March 14, 2017

Slick oil prices send Canadian dollar slip sliding away

The week in currency markets started out with an uneventful session yesterday, as participants watched tight ranges play out in thrilling fashion.

March 13, 2017

Event risk headlines upcoming week

The calm before the storm certainly would be a good description of the currency markets this morning.

March 09, 2017

ECB leaves rates unchanged

After starting the week slow, USDCAD embarked on a steady grind higher yesterday.

March 07, 2017

Lack of momentum causes quiet start to week

Tight ranges were the theme yesterday, with USDCAD content to wander around in a 40-point range for most of the North American session.

March 06, 2017

Political risk in France continues to hamstring Euro

Last week ended with a lineup of Federal Reserve speakers, the last communications ahead of the blackout period before the March rate decision next week.

March 06, 2017

Financial Markets weekly newsletter

Unemployment is low, inflation ticking up, and confidence high in the US. Here in Canada, well let’s just admit it, we are deeper and more nuanced.

March 03, 2017

USD strength takes a pause ahead of onslaught of Fed speak

If you were looking for an overused cliché to describe the events of yesterday but can’t quite put your finger on a good one, may I suggest “The trend is your friend”?

March 02, 2017

Bank of Canada keeps dovish tone

US dollar continues to surge with March rate hike back on the table.

March 01, 2017

US Fed hawks circle around a March rate hike

On a day where the focus was supposed to be on Trump’s State of the Union address to Congress, the US Fed stole the show.

February 28, 2017

Markets await Trump’s speech to congress

We kick started the week in currency markets with a groggy yawn on Monday, as participants were reluctant to have big positions ahead of risk events later this week.

February 27, 2017

Currency markets take a breather ahead of busy week

Friday brought us the most action we have seen in USDCAD in a number of sessions, as a strong headline inflation number saw CAD strengthen against the USD.

February 23, 2017

USD slides continues after dovish Fed’s minutes

Fed minutes were slightly dovish with no hints of a March hike yesterday.

February 22, 2017

Canadian retail sales underwhelm

For those watching USDCAD who managed to stay awake through yesterday’s session.

February 21, 2017

USD well bid as market ponders March rate hike

Hopefully everyone enjoyed the long weekend.

February 17, 2017

Messy politics in France continue to hamstring Euro

After briefly breaking below 1.3020 in USDCAD on Thursday morning, USDCAD found strong buyers as the support band ahead of the figure held strong.

February 16, 2017

March rate hike on the horizon?

After strong retail sales and CPI prints yesterday, you may be surprised to learn we walked in this morning almost 100 points lower in USDCAD from the highs of yesterday.

February 15, 2017

Strong North American data sees USD and CAD strengthen

Testimony from Janet Yellen turned out to be anything but uneventful yesterday. She stressed that the Fed does not need to wait until fiscal policy kicks in to hike rates, and that a March rate hike has not been ruled out.

February 14, 2017

USD weakens as Trump security advisor resigns

The week kicked off with a quiet session yesterday, as a lack of data meant participants were once again focusing on the headlines.

February 13, 2017

Currency markets quiet ahead of Trump/Trudeau summit

Over the weekend President Trump hosted Prime Minister Abe from Japan and today he meets with Prime Minister Trudeau.

February 10, 2017

Canadian job numbers strong, hourly earnings disappoint

Yesterday looked to be a fairly uneventful session, with USDCAD grinding lower.

February 10, 2017

Financial Markets weekly newsletter

Literally the only story in town this week has been the newly released employment report.

February 09, 2017

USD weakens as crude hangs in

This week seems to be moving at a pace just slightly faster than Trump’s cabinet confirmations.

February 08, 2017

Market consolidates on lack of conviction

The markets are jumping this way and that without any real conviction.

February 07, 2017

USD bulls return to the bandwagon

Yesterday proved to be fairly uneventful, with risk-off sentiment permeating the market.

February 06, 2017

USD gains strength to start the week

A slow start to the week, with participants nursing their Super Bowl hangovers.

February 03, 2017

US employment report produces mixed bag of results

This morning US employment numbers are the big story, with Nonfarm Payrolls gaining 227k compared to expectations of 180k.

February 03, 2017

Financial Markets weekly newsletter

Another quiet week on the rates front. Gov. Poloz spent some time in Canada’s greatest province to address the business school at the University of Alberta.

February 02, 2017

Central banks stand pat

Yesterday it was the US Fed’s turn in the Central Bank shuffle, and they managed to underwhelm the market.

February 01, 2017

Fed day

All eyes focus on the FOMC rate decision today at noon.

January 31, 2017

Canadian GDP stronger than expected

The week started off fairly uneventful yesterday, as participants jockeyed for position ahead of the big three Central Bank announcements that began with the Bank of Japan.

January 30, 2017

Central Bank decisions headline busy week in currency markets

Friday represented a slow grind higher in USDCAD, as the market seemed determined to end the week above the 100 week moving average that now sits right around 1.3100.

January 26, 2017

USD buying returns overnight as US yields break higher

The Canadian dollar enjoyed gains yesterday, as broad USD weakness remained.

January 25, 2017

CAD appreciates as Trump continues parade of executive orders

The Canadian dollar enjoyed gains yesterday, as broad USD weakness was compounded by Trump signing an executive order to approve the Keystone XL Pipeline.

January 24, 2017

British Supreme Court rules parliament must approve trigger of Article 50

USD selling was the name of the game yesterday, as Steve Mnuchin’s comments about a stronger dollar being a headwind to a stronger US economy ignited selling.

January 23, 2017

A new era begins

Friday was the big day, as Donald Trump was officially inaugurated as the 45th President of the United States.

January 20, 2017

Financial Markets weekly newsletter

Context is everything isn’t it? Gov. Poloz did indeed say that an interest rate cut “remains on the table” at the press conference following the MPR this week.

January 20, 2017

Inauguration day

Donald Trump becomes the 45th President of the United State today.

January 19, 2017

ECB leaves rates unchanged

Central Banks continue to be the flavour of the week, with the Bank of Canada leaving rates unchanged as expected yesterday.

January 18, 2017

Bank of Canada kept rate unchanged

USD sold off against most currency yesterday with Trump saying USD is too strong in an interview.

January 17, 2017

USD weaker across the board as Trump suggest USD too strong

After a quiet North American session yesterday due to MLK Day in the United States, the overnight session certainly brought more action.

January 12, 2017

Trump presser underwhelms causing USD to sell off

Yesterday The Donald staged his first press conference in months, with many hoping he would lose the theatrics and focus on fiscal policy specifics as well as other policies under his regime such as repealing Obamacare.

January 11, 2017

All eyes on Trump’s first press conference since July

Fasten your seatbelts, everyone, as today is the first press conference for The Donald as President Elect.

January 10, 2017

GBP trades fresh lows against USD

A fairly quiet session to kick off the week yesterday, as broad USD weakness remained the key theme on Monday.

January 09, 2017

GBP weakens as politicians continue to insist on hard Brexit

Friday was certainly an interesting session, with Canadian employment numbers surprising the market to the upside.

January 05, 2017

USD weakens as Fed minutes offer little of interest

Just like the Bruce Springsteen song, USDCAD was Born to Run stops yesterday.

January 04, 2017

Canadian dollar outperforms overnight

Despite a nosedive in WTI yesterday, CAD managed to hold its ground as the New York USDCAD close printed at 1.3427.

January 03, 2017

Markets start 2017 with a slow crawl

2017 has started a little slow, with Japan and New Zealand closed overnight liquidity was quite thin again.

December 30, 2016

Financial Markets weekly newsletter

George Santayana is credited with saying, “Those who do not learn history are doomed to repeat it.”

December 23, 2016

CAD weakens heading into Christmas weekend

For those of you that have the misfortune of being in the office today, I have decided to further punish you by issuing an FX commentary.

December 22, 2016

Financial Markets weekly newsletter

It's been a quiet week for data and volatility, with yields in a fairly tight range.

December 21, 2016

Riksbank extends QE, leaves rates unchanged

Why are we leading with the news that the Swedish Central Bank, the Riksbank, extended their QE and left rates unchanged? Because that is about the most exciting thing that happened overnight.

December 20, 2016

Markets consolidating ahead of holidays.

Not much to talk about as most currencies are trading close to yesterday’s close with the exception of the yen.

December 19, 2016

USD strength remains the name of the game

The trend was your friend on Friday, with USD buying continuing to be the dominant trade.

December 16, 2016

Financial Markets weekly newsletter

The BOC released its Financial System Review this week. It highlighted the “elevated” risks of “national household financial stress, combined with house price correction."

December 15, 2016

Fed surprised market with hawkish dots

The Fed finally delivers with a 25bp that was expected universally.

December 13, 2016

All eyes waiting on the last fed meeting of the year

All markets are trading range bound as traders wait for the FOMC decision tomorrow.

December 09, 2016

CAD continues to gain strength as market turns focus to the Fed

Yesterday saw USDCAD chop around in a 50-pt range for most of the session, eventually breaking below 1.3200.

December 08, 2016

ECB announces asset purchases through end of 2017

Yesterday saw CAD dollar strengthen against the US, as a fairly uneventful decision by the Bank of Canada had the market take the path of least resistance and send USDCAD lower.

December 07, 2016

CAD takes a breath as market focuses on BoC language

Yesterday saw USDCAD test higher early, hitting 1.3311 before fading to close the session near where it started.

December 06, 2016

CAD chops around as WTI retraces

Yesterday saw CAD strengthen again, setting a new recent low of 1.3236 as oil enjoyed gains early in the session.

December 05, 2016

EUR whips around as Italians vote no

Last week ended with employment numbers in the US and Canada.

November 30, 2016

CAD blows in the wind as market waits on OPEC

Yesterday was the calm before the storm in USDCAD, with participants content to trade in a range ahead of the OPEC announcement this morning.

November 29, 2016

OPEC doubts grow as USD regains some strength

Yesterday we saw general USD weakness in the market, as USDJPY broke through 112.

November 25, 2016

Markets crawl as the US celebrates Thanksgiving

With the US celebrating Thanksgiving yesterday, the markets that were open were confined to very tight ranges.

November 23, 2016

USD strengthens on strong durable goods orders

After spending most of the overnight session in a 30 point range, USDCAD is testing higher this morning.

November 22, 2016

USD weakness continues as risk-on sentiment grows

USDCAD continues to test lower, breaking through 1.3400 again overnight as markets get more accustomed to a potential production cut from OPEC.

November 21, 2016

CAD strengthens as oil prices enjoy gains heading into OPEC meeting

CAD has started the week off on a positive note.

November 17, 2016

CAD follows crude as oil headlines push around commodity currencies

CAD was dragged around by Crude yesterday, as a bearish EIA inventory report caused initial USD strength and CAD weakness was quickly forgotten about.

November 16, 2016

CAD strengthens as crude enjoys strong gains

After experiencing a bit of trend exhaustion, CAD strengthened against the USD.

November 15, 2016

USD consolidates as participants take profit

After taking another run at 1.3600 early Monday morning, CAD slowly strengthened.

November 10, 2016

Dust settles as markets envision Trump presidency

In quite the reversal from overnight lows, equity markets, crude and most other risky assets managed to rebound.

November 09, 2016

Markets tumble as Trump is elected President of the US

Wow. If you were complaining about a lack of volatility in the markets, be careful what you wish for!

November 08, 2016

Markets open cautiously higher as Clinton shows slight lead in polls

Well the big day for our friends south of the border is finally here.

November 07, 2016

Currency markets focus shifts to US election

A reasonably quiet end to the week on Friday, as USDCAD was content to churn in a 30-point range for most of the day. The exception was a misguided OPEC headline stating that Saudi Arabia was going to raise production significantly, causing WTI to tumble

October 31, 2016

CAD opens stronger ahead of a busy week of economic data

USDCAD tested higher for most of the session on Friday, breaking through resistance at 1.3400 a couple of times.

October 28, 2016

USD Oscillates around 1.3400 as Q3 GDP Beats Expectations

USDCAD tested higher for most of the session yesterday, briefly running stops above 1.3400 before closing back under as US FI yields continue to increase.

October 24, 2016

CAD weakens overnight as oil sells off

After the flurry of Central Bank activity last week, the market takes a breather this week.

October 21, 2016

CAD Weakens after poor retail sales numbers

Quite the price action in EURUSD yesterday, after the ECB decision came out.

October 19, 2016

CAD strengthens ahead of BOC rate decision

CAD has strengthened overnight, as oil continues to creep higher.

September 12, 2016

Fed Governor Brainard in the spotlight

The Canadian dollar remains on the weak side.

September 06, 2016

Weak ISM number has USD long on the run

Market getting back into things after Labor Day long weekend.

August 29, 2016

Jackson Hole over, now for Non-Farm Payroll

Janet Yellen signalled a hawkish stance on Friday.

August 23, 2016

Markets wait for Jackson Hole

Volatility continues to be at its low as markets wait on the sideline.

August 15, 2016

Markets slow down with summer trading kicking in

Summer trading has kicked in as most currencies are trading close to Friday’s close.

June 28, 2016

Markets stabilizing after Brexit...for now

Yesterday, post-Brexit risk off sentiment is still lingering as capital runs to safe haven assets.

June 23, 2016

Currency: Brexit Day

The day that everybody is waiting for is finally here. The Brits are hitting the polls today to determine if the UK is going to stay in the EU.

June 20, 2016

Brexit off, risk on

Risk rallies after the latest UK referendum polls on the weekend show “remain” camp in the lead after “leave” camp in the lead last week.

June 13, 2016

Brexit and soft Chinese data sour risk sentiment

Risk-off this morning with three more EU Referendum polls released over the weekend, one showing a 10pt lead for the leave camp with mixed results for the other two.

June 01, 2016

Beige book and ECB put markets on hold

Yesterday, we saw nervous traders selling oil ahead of the OPEC meeting tomorrow.

May 30, 2016

Dual holiday keeping market quiet

As expected, the week is starting off quietly with both the US and UK off for holiday.

May 25, 2016

Bank of Canada stays steady on its course

The focus of the day is the Bank of Canada announcement and it was widely expected to remain unchanged at 0.5%.

May 11, 2016

USDCAD remains on the sideline

Oil price took a tumble yesterday as WTI fell from an overnight high of 45.94 in Asia to the low 44 range at the open.

May 09, 2016

Disappointing NFP not denting the USD rally

The RBA slashed inflation forecasts overnight while leaving GDP and unemployment projections unchanged.

May 02, 2016

Markets sit idle with several holidays

The market is off to a quiet start with UK and China both closed for holidays.

April 25, 2016

Currency: Monday, April 25

The week is starting off slowly as the market is in waiting mode for a couple of important central bank decisions this week.

April 21, 2016

Currency: Thursday, April 21

It’s a day of central bank decisions today. The Riksbank kept policy rates unchanged at -0.5% and extended QE by 45bn.

April 05, 2016

CAD weakens to 1.3220

Yesterday I felt some astonishment that CAD had managed to remain resilient in the face of weakening crude prices and hawkish comments from Fed Dove Rosengren.

March 31, 2016

CAD rallies to 1.2860

It’s been quite the week and we still have US non-farms jobs data to contend with tomorrow.

March 30, 2016

CAD rallies to 1.2915

Well, it’s been a somewhat baffling few weeks as a central bank watcher.

March 21, 2016

CAD consolidating in mid 1.3000s

I must confess CAD has given me some angst and heartburn of late.

March 16, 2016

CAD range trading around 1.3360 as market awaits FOMC rate announcement

Somewhat predictably, market participants have spent the last two days paring USD shorts.

March 14, 2016

CAD maintains last week’s gains despite crude rally stalling

Well, I am back after a week away and see CAD has continued to grind into the lower end of what I see the medium term range will be for the next few months.

March 09, 2016

Currency: Wednesday, March 9

WTI fell $2.30/bbl yesterday amid weak Chinese trade data sparking concern again over the world’s economy.

March 08, 2016

Currency: Tuesday, March 8

Yesterday, the bulls took over as risk sentiment continued its joyous mood in the past week. Iron ore prices had the biggest one-day rise on record and Brent crude traded over $40/bbl. CAD got supported in the risk-on environment.

March 04, 2016

CAD rally extends to 1.3335 as commodity prices firm

CAD has been able to maintain its gains this week, twice rejecting a move above 1.3490, each time recovering back to 1.3415/20 where it was this morning when us jobs data came out.

March 01, 2016

CAD stages strong rally

It’s been an eventual session as the market has caught somewhat wrong footed by the extent of the CAD rally. This morning Stats Can released December and Q4 GDP data.

February 26, 2016

Currency: Friday, February 26

Well, this week has taught me not to make bold statements about market direction when coming back from vacation.

February 24, 2016

Currency: Wednesday, February 24

Well, took a few days off and see CAD continues to range trade, reacting to various crude headlines.

February 22, 2016

Currency: Monday, February 22

Brexit, the topic that everybody is talking about over the weekend. UK has set a date to vote on whether to stay...

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