Several U.S. and Canadian fundie catalysts makes the intraday rally in USD/CAD the one to watch for the session.
Intermarket Snapshot
| Equity Markets | Bond Yields | Commodities & Crypto |
| DAX: 10869.76 -0.56% FTSE: 6808.83 -0.78% S&P500: 2613.84 -0.09% DJIA: 24173.14 -0.14% |
US 10-yr 2.736% +0.007 Bund 10-YR 0.236% +0.013 UK 10-YR: 1.33% +0.02 JPN 10-YR: +0.008% +0.004 |
Oil: 51.57 -1.41% Gold: 1290.70 +4.96% Bitcoin: 3590.48 -0.58% Etherium: 119.95 -1.93% |
Fresh Market Headlines & Economic data:
- Philadelphia Fed manufacturing index rebounds in January
- U.S. Jobless Claims Fall to 5 Week-Low Despite Government Shutdown
- ECB hawk Lautenschlaeger has not given up on 2019 rate hike
- Calls for a second Brexit referendum grow as Theresa May fights for a new deal
- UK lenders see demand for mortgages, credit cards plummeting before Brexit: BoE
- BOJ Governor Kuroda’s comments at news conference
- BOJ warns Japan faces new risks as population shrinks
- Australia Home Loans Slip 0.9% In November
- ADP non-farm employment change -13K vs 74k previous
- OPEC oil production sinks in December as Saudis cut output more than expected
Upcoming Potential Catalysts on the Forex Calendar:
- BOE’s Carney and Woods speak in London at 3:00 pm GMT
- Fed’s Quarles participates in discussion in New York at 3:45 pm GMT
- Japan National core CPI y/y at 11:30 pm GMT
What to Watch: USD/CAD
Today, we’re looking at USD/CAD as we just got a few pieces of economic data that could keep volatility bid in both the U.S. dollar and the Canadian dollar.
Early in the morning U.S. session, we saw a better-than-expected read on the Philly Fed manufacturing index (17.0 actual vs. 9.5 forecast) and a decrease in unemployment claims to 213K versus 216K in the previous month. From Canada, the ADP Non-farm employment change came in weaker at a net loss of 13K jobs in December versus a 74K net gain in November. Weaker oil prices may also be supporting a break higher.
There was a bullish reaction to the data, and given the intraday uptrend, likely on the global risk-off sentiment we’re seeing today, a break above the 1.3300 handle is one to watch for the bulls. This could turn into a multi-session move if broad risk sentiment continues to lean towards risk-off. Let’s see if the market can sustain above 1.3300 first.
For the bears, it’s a tough argument to make until you get below the consolidation area we’ve seen over the last few trading sessions, where the bottom lies around the 1.3240 handle. It’ll take a return to risk-on sentiment (more central bank stimulus news?) and probably a rally in oil prices to see USD/CAD move down enough for a break in the next session or two.