Tag Archive: Bank of Canada

Fragile Calm Ahead of ECB Meeting

The Asian equity markets failed to retain the early gains that had at least partially been fueled by the US equities recouping half of their losses.  The MSCI Asia-Pacific Index lost about 1.7% and finished at new 3.5 year lows.    European markets are posting minor gains, with the Dow Jones Stoxx 600 up about 0.25% … Continue reading »

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Cool Video: Canadian Dollar Discussion on BNN

I had the privilege today to appear on Canada's Business News Network. It is a great source for information on the Canadian economy and markets.  I was interviewed by Michael Hainsworth. We discuss the Bank of Canada's decision not to cut rates...

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Great Graphic: Canadian Dollar Resilience in Face of 7% Drop in Oil

This Great Graphic, composed on Bloomberg, shows two-time series.  The white line is the premium the US government pays to borrow over the Canadian government for two years.  The yellow line the US dollar against the Canadian dollar.   Even th...

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Markets Resume New Year Slide

The market meltdown is extending into the third consecutive week.  Once again, the attempt to stabilize has failed, and bottom pickers have been punished. It is easy to line up poor news developments, including IMF cutting world growth on the same day that the IEA warns of an extended glut in the oil market, the … Continue reading »

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Tomorrow’s News Today

There are three important economic events tomorrow.    The UK will release its December employment report and November weekly earnings data.  The US reports December CPI.  The Bank of Canada meets, and is widely expected to be the first centra...

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Week Ahead: What Will It Take to Stabilize the Capital Markets?

Two weeks into the year and most investors are nursing sizable drawdowns.  The recovery in the US equities on January 14 looked like a potential turning point. However, the coattails proved non-existent, and the bull trap was sprung with new downside momentum established before the weekend. The obvious takeaway is that the current driver is not …

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When Loons Cry: Will the Bank of Canada Cut Rates Next Week?

Speculation is mounting that the Bank of Canada will be the first major central bank to cut rates this year.  It meets on January 20.  The combination of the drop in oil prices (40% since mid-October) and the erosion of the business outlook has boosted the risk of a cut next week.   The bitumen from … Continue reading »

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Nuanced Dollar Performance Likely in the Week Ahead

A tumultuous start of the year saw the US dollar turn in a mixed performance.   Emerging market currencies and the dollar-bloc softened.  Sterling was in this camp, losing about 1.2% against the dollar.  On the other hand, the euro, Swiss franc...

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Focus is Squarely on Equities, Dollar and Yen Firmer

Chinese shares and the yuan stabilized with the apparent help of the government's guiding hand, but global markets are still on the defensive.     The euro extended yesterday's decline through the $1.08 level.  The next immediate technical obj...

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The Dollar’s Technical Tone at the Start of the New Year

The US dollar firmed against nearly all the major currencies in the last week of 2015.  The exceptions were the Antipodean currencies and the Japanese yen. The relatively high short-term yields offered Australia, and New Zealand may have attract...

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Three Rate Differentials to Note

During this holiday period, participation is light and order-driven activity can push prices more than usual.  Investors should not let the noise and gyrations obscure the bigger picture.   We continue to place the divergence of monetary policy at the center of our narrative.     Barring a significant negative surprise from the labor market, we expect the …

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Hump Day Update

The thinness of the order-driven capital markets is making price action that seems more inexplicable than usual.  The US dollar is mixed. It has recouped all the ground it lows against the euro yesterday, as the single currency briefly dipped below $1.09 in the North American morning.  It was unable to build on yesterday's gains that … Continue reading...

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BOJ Surprises, but Substance Minor

The Bank of Japan was the fourth major central bank to meet this week.  Sweden and Norway kept policy unchanged.  The Fed hiked.  The BOJ was not expected to do anything.  Governor Kuroda surprised the market with largely operational tweaks to what Japan calls Qualitative and Quantitative Easing.  Initially, and perhaps with the help of …

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After ECB’s Hawkish Cut, Is the Fed about to Deliver a Dovish Hike?

After much hemming and hawing since mid-year, the Federal Reserve is finally poised to raise rates for the first time in nearly a decade. Indeed, given the speeches by the leadership and the economic data, especially the labor market readings, the failure to raise rates would likely be more destabilizing at this juncture than lifting them. …

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Technical Condition of the Greenback on the Eve of Lift-Off

The US dollar turned in a mixed performance in the week following the ECB's surprise and the healthy US jobs report.  In some ways, the greenback was like a fulcrum, not the driver.   The dollar-bloc currencies and the Norwegian krona were on ...

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Commodity Weakness takes a Toll, Rand Fall Continues, US Retail Sales Awaited

The US dollar is confined to narrow ranges against the euro and sterling after pushing higher yesterday.  The greenback is staging stronger upticks against the yen but is struggling to resurface above previous support in the JPY122.25 area.   Weak commodity prices and the loss of upside momentum has seen profit-taking in the Australian and New …

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After Gorging On News, Time To Digest

Last week lived up to the hype. It was indeed a momentous week. China joined the SDR, with a weight that puts it in third place behind the dollar and euro.  The ECB did ease policy. It delivered a 10 bp cut in the deposit rate (now -30 bp), extended its asset purchase program for six … Continue reading »

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The Wait is Nearly Over, and the Dollar Catches a Bid

The anticipation is nearly over.  The softer than expected preliminary EMU inflation figures encourages expectations for the more aggressive range of actions by the ECB tomorrow.  Draghi has claimed that movement toward the inflation target was to...

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Great Graphic: Canadian Growth and Rate Expectations

Canada reported its monthly GDP estimate for September, and at the same time, provided its first estimate of Q3 GDP.   The Great Graphic, created on Bloomberg, shows both time series. The monthly GDP is depicted by the yellow line and the quart...

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Dollar Trades Heavier, Key Events Awaited

The US dollar is trading with a heavier bias today amid some last minute position squaring ahead of the key events of the week, which are stacked in the second half.  The ECB meeting and US jobs data are the two most important events in a jam pa...

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