Article Highlights

  • Canada’s headline CPI up by 0.6% vs. 0.3% forecast
  • Canada’s core CPI up by 0.7% vs. 0.4% forecast
  • Canadian headline retail sales increased by 0.4% vs. -0.8% estimate
  • Canadian core retail sales increased by 0.2% vs. -0.8% estimate
  • U.S. flash manu PMI fell from 51.5 to 50.8 vs. 51.9 consensus
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Yen pairs soared across the forex charts, as traders were eager to price in their expectations for additional BOJ easing, while the Greenback stayed supported by risk-off flows.

Major Events:

Strong Canadian data – All green! Canada’s CPI and retail sales reports beat expectations, signaling a pickup in inflation and consumer spending in the Great White North. The headline CPI rose 0.6% versus the 0.3% forecast while the core CPI advanced by 0.7%, higher than the projected 0.4% increase.

Meanwhile, headline retail sales rose 0.4% instead of declining by the estimated 0.8% figure while core retail sales posted a 0.2% uptick. Components of the report revealed that the gains were driven mostly by sales of motor vehicles and parts.

BOJ easing speculations? With the BOJ interest rate decision fast approaching, traders began speculating on the odds of additional easing as early as Friday, way before they started buzzing about the return of Game of Thrones, causing the Japanese currency to get dumped across the board. After all, the central bank may need to dole out additional economic stimulus after the recent quakes in Japan, especially since their negative interest rates and currency jawboning didn’t seem to produce their desired effect earlier this year.

Major Currency Movers:

JPY – The Japanese yen was the biggest loser for the day, with forex junkies closing out their long positions ahead of this week’s BOJ decision.

USD/JPY surged from a low of 109.33 to a high of 111.81, EUR/JPY climbed from a low of 124.33 to a high of 125.51, GBP/JPY rallied from the 158.00 levels to a high of 161.18, and AUD/JPY soared to the 86.00 major psychological resistance.

GBP In contrast to the yen’s performance, the pound emerged as the strongest of the bunch, as anti-Brexit remarks from officials continued to give the currency a boost.

GBP/USD is still trying to break past the resistance around the 1.4450 mark, EUR/GBP broke below support at .7900 to a low of .7784, GBP/AUD surged from the 1.8600 area to a high of 1.8709, and GBP/NZD rallied to a high of 1.4123.

CAD – Thanks to upbeat data from Canada and a small gain in oil prices, the Loonie was able to advance against its forex peers at the end of the week.

USD/CAD retreated from a high of 1.2758 to a low of 1.2702, CAD/JPY surged past the 88.00 mark to a high of 88.20, EUR/CAD is down to the 1.4250 minor psychological mark, and AUD/CAD tumbled to a low of .9762.

Watch Out For:

  • Australian and New Zealand banks closed for the holiday

See also:

Asian Session Recap

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

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