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There wasn’t much in the way of top-tier U.S. reports on Monday so majors took a break from their post-NFP party while Loonie traders priced in BOC expectations.

  • U.S. labor market conditions index down from 3.3 to 1.5 in June
  • U.S. consumer credit at $18.4B vs. $12.1B forecast, $12.9B previous

Major Events/Reports

Medium-tier U.S. releases

The Fed’s labor market conditions index, which is a combined reading of 19 employment-related indicators and designed to help the central bank gauge overall labor market activity, came in weaker than expected at 1.5 in June versus the consensus at 2.5.

This is also lower than the previous reading of 3.3, which enjoyed an upgrade from the initially reported 2.3 figure. Still, the positive reading for June marks its thirteenth consecutive gain, reflecting solid momentum in employment.

Meanwhile, the U.S. consumer credit report printed a stronger than expected read of $18.4 billion in May, way beyond the consensus at $12.1 billion and the earlier $12.9 billion figure. This marks the fastest pace of increase in half a year, signaling that consumers’ financial confidence is pretty strong.

The latest report indicated a pickup in credit card spending, likely as consumers have made more travel-related expenses rather than making purchases of clothing and other items in physical stores. Another factor that contributed to the strong gain is higher auto loans and student loans.

Equities and commodities end mixed

U.S. equity indices managed to chalk up some gains for the day as risk-taking from earlier sessions carried on.

  • S&P 500 index closed 2.25 points higher to 2,427.43 (+0.09%)
  • Nasdaq ended 23.31 points up to 6,176.39 (+0.38%)
  • Dow 30 index was down 5.82 points to 21,408.52 (-0.03%)

These risk-on vibes also allowed commodities to recover, except for gold which is usually treated as a safe-haven.

  • Gold is down to $1,212.49 per troy ounce (-0.06%)
  • WTI crude oil ticked higher to $44.49 per barrel (+0.20%)
  • Brent crude oil is up to $47.01 per barrel (+0.01%)

Major Market Mover(s):

CAD

The oil-related Loonie got a boost from a rebound in Black Crack and expectations of hawkish remarks in the upcoming BOC decision.

USD/CAD slipped from a high of 1.2936 to a low of 1.2872, CAD/JPY held on to its gains at 88.50, EUR/CAD dipped from 1.4726 to a low of 1.4658, and GBP/CAD is down to the 1.6600 handle.

Watch Out For:

  • 2:30 am GMT: Australia NAB business confidence index (previous reading at 7)
  • 2:30 am GMT: Australian home loans (1.5% increase expected, -1.9% previous)
  • 7:00 am GMT: Japanese preliminary machine tool orders y/y (24.5% previous)