Article Highlights

  • Empire State manu index up from -11.4 to -10.7, lower than -5.3 forecast
  • Canadian Sept manufacturing sales slump 1.5% vs. +0.3% forecast
  • Canada’s foreign securities purchases down from 5.78B to 3.35B CAD
  • WTI crude oil bounced to $42/barrel, Brent crude oil back above $44/barrel
  • U.S. equity indices up more than 1% on Monday’s trading
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Not even bleak U.S. data could drag the Greenback down, as the dollar drew forex support from the recovery in U.S. equities. Risk aversion still seems to be in play, although crude oil prices managed a strong bounce off their recent lows.

Major Events:

Empire State manufacturing index – First, the good news. The Empire State manufacturing index managed to post an improvement in October, climbing from the previous month’s -11.4 reading to show a slower pace of contraction at -10.7. The not-so-good news is that this is far below market expectations of a rise to -5.3.

Oil price bounce vs. weak Canadian data – Black crack suffered another quick drop when risk aversion set in, but the commodity managed to bounce off key support levels as market watchers zoomed in on the potential implications of the airstrikes in Syria on oil output.

WTI crude oil bounced off the $40/barrel mark and is closing in on $42/barrel (+3.04%) while Brent crude oil recovered from the $44/barrel area and is up to $44.82/barrel (+0.88%). In Canada, manufacturing sales posted a worse-than-expected 1.5% slump while foreign securities purchases fell to 3.35 billion CAD in October, reflecting lower demand for the Canadian currency.

Major Currency Movers:

USD – After gapping down over the weekend and hitting a few road bumps in the earlier forex trading sessions, the U.S. dollar is back on its climb fueled mostly by risk aversion.

USD/JPY advanced 61 pips to 123.16 (+0.05%), EUR/USD broke below the 1.0700 major psychological level and is down 85 pips to 1.0685 (-0.79%), and USD/CHF popped past its previous highs to 1.0098 (+0.40%). The pound seems to be the only resilient currency against the dollar, with GBP/USD fighting to hold on to 1.5200 (+0.05%).

CAD – Bleak economic data played a role in the Loonie’s forex price action, but the Canadian currency eventually got a boost from the oil price bounce.

USD/CAD bounced off the 1.3300 handle up to a high of 1.3372 before retreating to 1.3326 on the oil price bounce (+0.04%), CAD/JPY found support at the 92.00 major psychological mark and is up to 92.42 (+0.47%), EUR/CAD slid from an intraday high of 1.4332 to 1.4238 (-0.75%), and GBP/CAD is down to 2.0262 (-0.13%).

Watch Out For:

  • RBA meeting minutes at 1:30 am GMT (What to expect)
  • New Zealand quarterly inflation expectations at 3:00 am GMT (1.9% previous)

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