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June rate hike locked and loaded

Posted on: May 05, 2017

USDCAD made fresh highs on Thursday as oil continued to slide away. WTI managed to break through support at $44 dollars overnight briefly before buyers stepped in to push it back higher. Yesterday the House passed the revised version of Trumpcare in a close vote. With the Senate likely to rewrite the whole bill it was more of a PR victory than anything else, but he likely needed one to provide a bit of confidence that he is able to whip up enough votes to get things done.

This morning was double Non-Farm payroll numbers in Canada and the US, with nothing in the US report to dissuade the Fed from hiking in June (Now 100% priced in). US headline numbers came in at +211k, above expectations of +190k with the unemployment rate falling to 4.4%. The prior month was revised even lower to only +79k and Average Hourly Earnings continue to lag YoY expectations, but no major red flags. In Canada the unemployment rate dropped two ticks to 6.5% despite a slight miss on the headline number (+3.2k compared to expectations of +10k), but one concerning detail is the gains were found in part-time jobs with full-time jobs declining.

For those watching USDCAD, we continue to watch the march up and to the right on the chart. For those who have been waiting for CAD to have a Price is Right moment where the yodeler takes one step too far and then drops off a cliff back to lower levels on the charts, I hope you aren’t holding your breath. Some consolidation is certainly possible with the quick run-up we have seen, so if you have to buy dollars you can leave orders down below to take advantage of any dips. We are going to need a lot more CAD-positive or USD-negative news than we are currently getting to see a sustained correction. The spread between US and Canadian 2yr yields continues to widen, breaking above levels we saw in January 2016 when USDCAD traded above 1.4000. 1.3839 remains the initial target on the top side, with the recent high of 1.3791 providing brief resistance. Scattered support levels through the 1.36s but key support still around the double tops just shy of 1.3600.

  • Yesterday’s NA Range 1.3706 – 1.3776
  • Asia Overnight Range 1.3747– 1.3793
  • London Overnight Range 1.3752– 1.3791


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NYMEX natural gas climbed 4.4 cents higher on Friday.

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Crude prompt futures gained $1.41 on Friday to close the day at $56.55.

November 17, 2017

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NYMEX natural gas continued it’s decent on Thursday.

November 17, 2017

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November 17, 2017

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Cold weather emerged over the long weekend in the US Midwest to East as anticipated.


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