sabato 25 gennaio 2014

Week In FX Americas – The Loonies’ Week from Hell

The Canadian dollar has taken it on the chin this week, already down -4.5% against its largest trading partner, the USD this year, the currency is closing out the week on the back foot and this despite the presence of a stronger retail sales headline print yesterday (+0.6%). Notwithstanding keeping rates on hold mid-week (+1%), the Bank of Canada’s policy statement leans towards a further easing bias, without explicitly making the change in stance.

Governor Poloz removed from its statement the phrase that the “substantial monetary policy stimulus currently in place remains appropriate,” which happened to appear in the last statement only a month ago. Many believe that within the context of the BoC’s heightened concern about persistently low inflation, the omission represents a step closer towards an easing bias.

However, on Friday, total inflation in Canada fell -0.2%, m/m in December, with a y/y pace of inflation to +1.2%, back into the Banks 1-3% target range from +0.9% in the month before. The increase in the yearly pace of both headline and core prices – up to +1.3% – is likely to bring some sense of calm to the “disinflation weary Governor Poloz.”

Canadian bond prices happened to soften slightly on the Canada’s inflation headline, but do remain better bid, along with US Treasurys from a flight to safety bid as investors scrambled out of riskier emerging assets. This too has the CAD shifting ever so slightly away from its newly cemented lows for the time being. Nevertheless, the “mighty buck” is expected to remain better bid on pullbacks until some normalcy reappears within all asset classes.

Goldman Sachs CEO Still Sees Opportunities in Emerging Markets

Canadian Inflation Hits 1.2 Percent in December

US Attorney Pledges No Bank Too Big to Indict

U.S. Treasurer Secretary Lew: Annual Growth could be 3%

US Treasury Yields Lowest Since Taper

US Unemployment Claims Rise Slightly But Trend Still Positive

US Treasury Secretary Warns Lawmakers About Upcoming Debt Ceiling

U.S. Dollar Continues to Roll

Japan and US Agree To Cooperate Further on TPP Deal

The Wealthy and the Wealth Gap

U.S. Dollar Higher on U.S. Growth Prospects

Global Investors Most Bullish Since 2009

WEEK AHEAD

* GBP Gross Domestic Product

* USD Durable Goods Orders

* USD Consumer Confidence

* USD Fed QE3 Pace

* USD FOMC Rate Decision

* NZD Reserve Bank of New Zealand Rate Decision

* EUR German Unemployment Rate

* EUR German Consumer Price Index

* USD Gross Domestic Product

* USD Personal Consumption

* JPY National Consumer Price Index

* EUR Euro-Zone Consumer Price Index

* CAD Gross Domestic Product

* CNY Manufacturing PMI