With no major catalysts from Canada, Loonie traders moved off of global risk sentiment and counter currency flows.
Canadian Headlines and Economic data
- Major global risk-off sentiment to start off the week after the mayor of Wuhan, epicenter of coronavirus outbreak, says 5 million people left the city before travel restrictions were imposed.
- Risk aversion sentiment grows as China confirms 2,700 cases of virus, 40 counted elsewhere.
- The Coronavirus story was the major market driver for the week, pushing traders out of “riskier” assets into less riskier assets. This is why we see the Loonie fall to the rest of the majors for the week, with exception to the Aussie and Kiwi, which are usually considered by traders as more “risk-on” than the Loonie in most situations. This is also why we saw a drop in oil right at the start of the week.
- Risk aversion behavior picked up quickly on the session and was likely what pushed the Loonie lower, once again on Coronavirus fears as there was nearly 1,500 new cases in a few days and the death toll rose to 132.
- Real gross domestic product (GDP) edged up 0.1% in November, offsetting most of the decline in October.
- The Industrial Product Price Index edged up 0.1% in December, driven primarily by higher prices for primary non-ferrous metal products.
- The Raw Materials Price Index (RMPI) rose 2.8% in December, after posting a 1.4% gain the previous month.
- Risk aversion accelerates once again during the Friday session as the US raises travel warning, Singapore bans Chinese travelers as outbreak spreads. Also, the U.S. declares coronavirus a public health emergency.