Week In FX Americas – The Loonies’ Week from Hell

via MarketPulse:

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

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Week In FX Americas – The Loonies’ Week from Hell

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1994-2013 Callan Periodic Table of Investment Returns

1994-2013 Callan Periodic Table of Investment Returns

via My Money Blog:

Reader Ben shared this in the comments, and I think it deserves a separate mention. Every year, investment consultant firm Callan Associates updates a neat visual representation of the relative performance of 8 major asset classes over the last 20 years. You can find the most recent one below (click to view PDF), which covers 1994 to 2013. Each year, the best performing asset class is listed at the top, and it sorts downward until you have the worst performing asset. You can find previous versions here.

You can try to find some patterns, but I doubt you’ll find anything significant. Sometimes an asset class has a hot streak that last a few years, and other times an asset class is on top one year and bottom the next. Most recently, Emerging markets equities were on top in 2012, and bottom in 2013.

Also, while the table compares relative performance, you can also note that absolute performance changes all the time as well. In 2013 the best asset class returned +43% while the worst asset class returned -2%. Contrast this with 2008, when the best asset class returned +5% while the worst asset class returned -53%. Sometimes you just can’t lose, and other times you just can’t win.

So I won’t bother predicting what will happen in 2014, and will instead continue owning multiple, less-correlating asset classes using low-cost passive investments. Oh, and I make sure to rebalance them regularly.