Happy Friday everyone!
Hipster Supermans, Minnie Mouse, and don't forget the Blind Ref!
Good night folks.
Friday, October 31, 2014
VBCE Daily Foreign Exchange Update for Friday, Oct. 31st, 2014
USDCAD spot rate: 1.1280 - 1.1285 (AS AT 8:32AM PST)
RANGES:
|
Asia:
|
1.1183
|
to
|
1.1211
|
Europe:
|
1.1190
|
to
|
1.1223
|
|
North America:
|
1.1190
|
to
|
1.1332
|
Technical Support / Resistance:
S2
|
S1
|
R1
|
R2
|
1.1070
|
1.1120
|
1.1225
|
1.1255
|
Key Economic Data Releases:
-Canada GDP: -0.1%
(exp. 0.0%)
-U.S.
Core personal consumption expenditure price index: 1.5% (prev. 1.5%)
-U.S.
personal income: 0.2% (exp. 0.3%) spending: -0.2%
(exp. 0.1%)
-U.S.
Michigan consumer sentiment index: 86.9 (exp. 86.4)
Key Event Calendar:
DATE
|
CANADA
|
U.S.A.
|
Nov. 3
|
RBC manufacturing PMI
|
ISM / Markit mfg PMI, construction spending
|
Nov. 4
|
Int’l merchandise trade
|
Trade balance, factory orders
|
Nov. 5
|
Housing starts
|
ADP employment change, Markit services
|
PMI, ISM non-manufacturing PMI
|
||
Nov. 6
|
Building permits, Ivey PMI
|
Initial jobless claims
|
Nov. 7
|
Net employment change,
|
Non-farm payrolls, unemployment rate
|
unemployment rate
|
Participation rate
|
Yesterday, USDCAD traded from 1.1181 up to 1.1223 before
falling to 1.1163. The pairing then bounced to 1.1191. Overnight, USDCAD
climbed to 1.1220 on broad-based USD strength. The main catalyst was a surprise
announcement by the Bank of Japan. They expanded their monetary base / stimulus
program from $50 billion yen / year to 80 billion yen / year citing concerns
that lower oil prices will dampen their inflation outlook along with concerns
over reduced consumer spending. The USDJPY spiked higher and has traded from
109.18 to 112.48, its highest level in 7 years. USDCAD opened this morning’s
session at 1.1199 and climbed to 1.1332 after Canadian GDP missed estimates.
The pairing has since fallen to 1.1275. Currently, the TSX and the DJIA are
both up 1%. EURCAD is up 0.20% trading between 1.4060 and 1.4170. GBPCAD is up
0.80% trading between 1.7889 and 1.8093. JPYCAD is down 2% trading between
0.01025 and 0.01002. Gold is down 3% trading between $1,161 and $1,202USD/oz,
silver down 3% trading between $15.78 and $16.55USD/oz, while oil is down
1.57%, trading between $79.56 and $81.24.
Sources: Reuters, Bloomberg, FXStreet, RBC Capital Markets, Bank of Canada, U.S. Federal Reserve, CNBC, Forexlive
Please contact the VBCE trading desk at 604-685-1008 for more information on our foreign exchange and wire payment services. Updates by stevebrown@vbce.ca
The information contained in this report has been compiled by our VBCE traders from sources believed to be reliable, but no representation or warranty, express or implied, is made by VBCE as to its accuracy, completeness or correctness. All opinions and estimates contained in this report constitute VBCE’s judgment as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. Nothing in this report constitutes legal, accounting or tax advice or individually tailored investment advice. This material is prepared for general circulation to clients and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. This report is not an offer to sell or a solicitation of an offer to buy any currency or precious metals. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. To the full extent permitted by law neither VBCE nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein. No matter contained in this document may be reproduced or copied by any means without the prior consent of VBCE
Copyright © VBCE, All rights reserved.
For foreign currency exchange rates, visit www.vbce.ca/rates/major-currencies
For rates on precious metals, visit www.vbce.ca/rates/precious-metals
For questions, please contact us at info@vbce.ca or 604-685-1008.
#120-800 West Pender Street, Vancouver, BC V6C 2V6
Thursday, October 30, 2014
VBCE Daily Foreign Exchange Update for Thursday, Oct. 30th, 2014
USDCAD spot rate: 1.1183 - 1.1188 (AS AT 8:10AM PST)
RANGES:
|
Asia:
|
1.1181
|
to
|
1.1211
|
Europe:
|
1.1188
|
to
|
1.1223
|
|
North America:
|
1.1163
|
to
|
1.1210
|
Technical Support / Resistance:
S2
|
S1
|
R1
|
R2
|
1.1070
|
1.1120
|
1.1225
|
1.1255
|
Key Economic Data Releases:
-U.S. Fed interest rate decision: unchanged at 0 – 0.25%
/ QE3 flows completed
-U.S. GDP Q3: 3.5% (exp. 3.0%)
-U.S.
Personal consumption expenditure price index: 1.3% (exp. 1.4%)
-U.S.
initial jobless claims: 287k (exp. 283k)
Key Event Calendar:
DATE
|
CANADA
|
U.S.A.
|
Oct. 31
|
GDP
|
Core PCE price index, personal income /
|
spending, consumer sentiment index
|
Yesterday, USDCAD initially traded from 1.1173 down to
1.1120/25, its lowest level in 3 weeks on broad- based USD weakness ahead of
the 11:00am U.S. Fed announcement. As expected, the Fed officially ended its
quantitative easing program and changed the rhetoric of its statement noting “a
range of labor market indicators suggests that underutilization of labor
resources is gradually diminishing (and) …that there has been a substantial
improvement in the outlook for the labor market since the inception of its
current asset purchase program.” In the 15 minutes that followed the
announcement, the USD jumped higher across the board taking USDCAD from 1.1135
up to 1.1225. The pairing fell back to hold in a 1.1180/90 range for the
balance of the session. USD strength continued overnight and just ahead of this
morning’s 3RD quarter U.S. GDP
release, USDCAD revisited the 1.1223 level. Although the headline reading of
3.5% was better than expected, it was mostly attributed to an 11% increase in
exports and a 2.4% decline in imports. Several components were weaker than
expected – especially the inflation component which fell to 1.3% from 2.1%.
USDCAD dropped to 1.1163/68 amidst broad-based USD weakness. EURUSD bounced
from 1.2548 – 1.2639 despite the European Central Bank announcing their plans
to buy asset backed securities (similar to the U.S. Fed’s QE program) while
USDJPY fell from 109.35 to 108.75. The move lower was short-lived and the USD
is reversing its losses with USDCAD back up to 1.1200. Currently, the TSX is down
0.60% while the DJIA is up 0.79%. EURCAD is down 0.15% trading between 1.4061
and 1.4144. GBPCAD is unchanged trading between 1.7858 and 1.7930. JPYCAD is
down 0.15% trading between 0.01025 and 0.01028. Gold is down 1.85% trading
between $1,196 and $1,216USD/oz, silver down 4.43% trading between $16.37 and
$17.22USD/oz, while oil is down 1.23%, trading between $80.89 and $82.06.
Sources: Reuters, Bloomberg, FXStreet,
RBC Capital Markets, Bank of Canada, U.S. Federal Reserve, CNBC, Forexlive
Please contact the VBCE trading desk at 604-685-1008 for more information on our foreign exchange and wire payment services. Updates by stevebrown@vbce.ca
The information contained in this report has been compiled by our VBCE traders from sources believed to be reliable, but no representation or warranty, express or implied, is made by VBCE as to its accuracy, completeness or correctness. All opinions and estimates contained in this report constitute VBCE’s judgment as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. Nothing in this report constitutes legal, accounting or tax advice or individually tailored investment advice. This material is prepared for general circulation to clients and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. This report is not an offer to sell or a solicitation of an offer to buy any currency or precious metals. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. To the full extent permitted by law neither VBCE nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein. No matter contained in this document may be reproduced or copied by any means without the prior consent of VBCE
Copyright © VBCE, All rights reserved.
For foreign currency exchange rates, visit www.vbce.ca/rates/major-currencies
For rates on precious metals, visit www.vbce.ca/rates/precious-metals
For questions, please contact us at info@vbce.ca or 604-685-1008.
#120-800 West Pender Street, Vancouver, BC V6C 2V6
Wednesday, October 29, 2014
VBCE Weekly Market Dispatch - October 20-24 2014
October 20-24 2014
R.I.P. QE
We mentioned at the end of
last week’s Dispatch that we expected the USD to be on the sidelines due to the
lack of yield support and talk of tapering the taper. This is exactly what
transpired last week as the USD was soft in the first half of the week, but
recovered in the second half to end the US dollar index weekly losing streak at
2 after 12 consecutive positive weeks.
Lately, the USD has not been
getting support from domestic economic data, but rather from the notion that
foreign governments and central banks would have to do more in order to support
their economies. Last week, speculation was rekindled that the Bank of Japan
and the ECB may need to add more simulative measures. The Bank of Japan now
sees a much bigger possibility of inflation slipping below 1%, fanning
speculation for additional easing. The BOJ’s next meeting is on October 31st,
which is the same day that the September inflation report is released.
Meanwhile in the Eurozone, speculation of more easing was spurred by reports
that the ECB may consider adding corporate bonds to its asset purchase program.
The ECB meets the following week. (Move along now – there’s no currency war
going on).
The FOMC meeting on Wednesday
will be the most important event of the week. The Fed is due to announce the
end of QE despite last week’s comments by James Bullard, the St Louis Fed
president, having made it appear slightly less certain. We expect the Fed’s
accompanying press release to strike a very dovish tone considering the market
volatility over the last couple of weeks (more on this below). Keep in mind
that the “R.I.P. QE” only applies to monetary policy in the USA, it is alive
and well in the UK and Japan, and the pressure is building for its introduction
in the Eurozone.
What will the Fed Do?
After some jittery market
nerves around the middle of this month, expectations have settled down, and the
Fed is generally expected to announce the concluding of QE. The part of the
statement that is normally devoted to QE could mostly be removed, which will
make for a shorter and more succinct declaration. Given
genera understanding of the
way the Fed operates, with key principal
centrists (Yellen, Fischer and Dudley)
mostly driving policy, this statement
is their heart, more so
than the minutes or dot-plot.
Mr. Mohamed El-Erian, Chief
Economic Advisor at Allianz SE and Chairman of President Barak Obama’s
Global Development Council
provides some excellent insight into what the Fed is likely to do this week:
1. Fed officials will slightly upgrade their
assessment of economic prospects. But their enthusiasm will be moderated by
renewed concerns about global economic weakness.
2. They will acknowledge the further decline in
the unemployment rate, while also noting that it overstates the improvement in
labor market conditions.
3. They will recognize the moderation of
inflationary pressures but hold back on declaring deflation an imminent threat
to economic well-being. Instead, they will observe that part of the downward
pressures on prices -- coming from lower oil prices -- provides both a boost to
consumer spending and offsets higher food costs.
4. They
will complete the
phased exit from
QE3, bringing large-scale
purchases of securities to an
end.
5. Finally, central bankers will shy away from
hinting that they are willing to consider a subsequent program of asset
purchases (QE4). Instead, they will reiterate their willingness to keep
interest rates low, should economic conditions warrant it.
(Full article found at
Bloomberg View)
In addition to these words,
the market will dissect how the Fed characterizes inflation. Recall that in September, the FOMC had
dropped the reference to the risk of core inflation being persistently below
target, hence, it would seem awkward to simply bring it back. It could refer to the breakdown in
market-based measures of inflation prospects, but also note that it has not
been confirmed in other measures.
VBCE Daily Foreign Exchange Update for Wednesday, Oct. 29th, 2014
USDCAD spot rate: 1.1138 - 1.1143 (AS AT 8:15AM PST)
|
RANGES:
|
Asia:
|
1.1158
|
to
|
1.1173
|
|
|
Europe:
|
1.1151
|
to
|
1.1167
|
|
|
North America:
|
1.1120
|
to
|
1.1160
|
Technical Support / Resistance:
|
S2
|
S1
|
R1
|
R2
|
|
1.1070
|
1.1120
|
1.1185
|
1.1255
|
Key Economic Data Releases:
-Canada
raw materials price index: -1.8% (exp. -0.9%)
-Canada
industrial product price index: -0.4%
(exp. -0.1%)-U.S. Fed interest rate decision: TBA @ 11:00am
-Bank of Canada Governor Poloz speech @ 1:15pm
Key Event Calendar:
|
DATE
|
CANADA
|
U.S.A.
|
|
|
|
|
|
Oct. 30
|
|
GDP Q3, Core PCE, jobless claims
|
|
Oct. 31
|
GDP
|
Core PCE price index, personal income /
|
|
|
|
spending, consumer sentiment index
|
Yesterday, USDCAD traded from 1.1253 down to 1.1166, its
lowest level in nearly 3 weeks and down more than two cents from the 5 year
high of 1.1384 seen earlier this month. USDCAD briefly bounced to 1.1196 before
easing back to hold near 1.1171 for the balance of the session. Despite
Monday’s Goldman Sachs downwardly revised oil price forecast, Oil (WTI) has
climbed to $82.69 today after a low of $79.48 on Monday. Global equity markets
continued higher for the most part on yesterday’s strong North American gains.
USDCAD continued lower overnight to 1.1151 and has extended down to 1.1120/25
this morning. The pairing has since bounced to 1.1145. The USD and the JPY were
the worst performing currencies yesterday and that trend has continued today as
we await the 11:00am U.S. Fed announcement. It is widely expected that the QE3
stimulus program will officially come to an end while the market looks for
clues to when interest rates will begin to rise and by how much the Fed intends
to raise rates over the next few years. Currently, the TSX is down 0.72% while
the DJIA is unchanged. EURCAD is down 0.20% trading between 1.4173 and 1.4231.
GBPCAD is down 0.15% trading between 1.7927 and 1.8030. JPYCAD is down 0.15%
trading between 0.01029 and 0.01034. Gold is down 0.43% trading between $1,221
and $1,230USD/oz, silver unchanged trading between $17.16 and $17.32USD/oz,
while oil is up 1%, trading between $81.46 and $82.69.
Sources: Reuters, Bloomberg, FXStreet,
RBC Capital Markets, Bank of Canada, U.S. Federal Reserve, CNBC, Forexlive
Please contact the VBCE trading desk at 604-685-1016 for more information on our corporate foreign exchange and wire payment services. Updates by stevebrown@vbce.ca
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