Dr. Duru • Tue, Oct. 28
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at CNBC.com (Feb 16, 2011)
at MarketWatch.com (Dec 1, 2010)
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at CNBC.com (Jun 9, 2010)
at MarketWatch.com (Jun 1, 2010)
- The Bank of Canada's latest Monetary Policy Report includes a detailed examination of Canada's export weakness.
- A weaker Canadian dollar received credit for recent improvement in exports but lack of competitiveness is blamed for on-going excess capacity.
- With no mention of the strong September jobs number, the Bank of Canada failed to provide any positive catalyst for the CurrencyShares Canadian Dollar ETF.
Lost In The Market Angst: A Dramatic Improvement In Canadian Employment
- Statistics Canada reported surprisingly stronger job gains in September.
- Employment gains were broad based across sectors although concentrated in the same strong provinces and two age cohorts.
- The Canadian dollar lost ground despite the news. It may finally be time to turn bullish on the Canadian dollar while markets roil in angst on other catalysts.
Sell The Canadian Dollar, Buy The United States Dollar
- Speculator sentiment indicates that there is a 65% of the Canadian dollar falling through year-end.
- Economic rebound and the end of quantitative easing are bullish for the United States dollar.
- A Canadian housing bubble and the potential for diminished oil demand are bearish for the Canadian dollar.
Bank Of Canada Gets More Bearish Ahead Of More News Of Employment Stagnation
- The Bank of Canada downgrades risk characteristics of the Canadian economy.
- Canadian employment picture still lacks improvement.
- Relative advantage remains with the U.S. and the U.S. dollar over the Canadian dollar.
Jobs Numbers Underline Dovish Canadian Monetary Policy, Halting Rally In Canadian DollarDr. Duru • Mon, May. 12
- April employment numbers for Canada demonstrated notable weakness.
- Stagnant jobs growth underlines the recent relative dovishness of the Bank of Canada.
- The recent rally in the Canadian dollar against the U.S. dollar has likely ended as a result.
Canadian Dollar ETF Weakens On Slowing Exports And Fed
There are no Transcripts on FXC.
Nov. 27, 2013, 7:27 AM
- "Significant external imbalances have built up in the Canadian economy," says Goldman, recommending a short of the loonie (vs. the greenback) as its 2014 trade idea #3 (earlier ideas are here). The current account - in surplus prior to the financial crisis - has consistently been in deficit since by about 3% since, thanks to a big decline in manufacturing exports.
- Energy has been unable to pick up the slack as boosted crude production from the tar sands of Alberta has been offset by the decline in value of natural gas exports.
- Previously easy funding of the current account deficit changed for the worse in 2013, says Goldman, noting capital inflows have slowed rapidly over the past few quarters. One key reason: Emerging market central banks are no longer diversifying their forex holdings as quickly as before.
- Canadian ETFs: EWC, CAD, CNDA, FCAN, EWCS
- The loonie: FXC
Nov. 8, 2013, 8:48 AM| Comment!
Oct. 23, 2013, 10:18 AM
- The loonie (FXC -0.8%) slips about 45 pips after the Bank of Canada leaves its benchmark rate unchanged at 1%, but is decidedly dovish in its accompanying statement (though this was somewhat expected).
- The global economy's "near-term dynamic has changed and the composition of growth is now slightly less favorable for Canada ... Uncertain global and domestic economic conditions are delaying the pick-up in exports and business investment, leaving the level of economic activity lower than the Bank had been expecting."
- "The fact that inflation has been persistently below target means that downside risks to inflation assume increasing importance."
- ETFs: EWC, FCAN, CNDA, EWCS, CNPF, CAD.
Oct. 17, 2013, 9:21 AM
- Maybe most interesting in wake of the debt deal is the action in the dollar and Treasurys - both of which signal the Fed taper is out of the picture for some time. Yesterday's Beige Book indicated slowing economic growth across 4 of 12 Fed districts.
- Off another 5 basis points in morning action, the 10-year Treasury yield is down to 2.62% from 2.76% just ahead of the deal announcement yesterday. TLT +0.6%, TBT -1.3%.
- The dollar (UUP, UDN) is getting hit across the board, with the euro (FXE), pound (FXB), yen (FXY), and swissie (FXF), aussie (FXA), and loonie (FXC) all posting significant gains. The Swiss franc is the strongest, up 1.1%.
- Treasury ETFs: TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.
- Currency ETFs: UUPT, UDNT, ERO, ULE, URR, EUO, DRR, EUFX, GBB, FXY, JYN, YCL, YCS.
Oct. 1, 2013, 9:52 AM
- Canada's RBC PMI rises to a 15-month high of 54.2 in September, up from 52.1 in August. New export orders rose to their highest level in two and one half years.
- "The global economy is gaining traction, and, with that, we are seeing increasing demand for Canadian exports - particularly from the manufacturing sector," says RBC's Craig Wright.
- The loonie (FXC) shows little reaction, flat and buying $0.9694.
- Equity ETFs: EWC, FCAN, CNDA, EWCS.
Sep. 30, 2013, 8:55 AM
- Canadian GDP growth of 0.6% in July surpasses expectations of 0.5% and is the strongest print since July 2011. Before getting too excited, it's worth remembering GDP slid 0.5% in June - the biggest decline since the 2009 recession.
- On a year-over-year basis, GDP rose 1.4% in July, up from 1.1% in June.
- The headline is good for a 20 pip pop in the loonie (FXC), now +0.15% and buying $0.9720.
- Canadian ETFs: EWC, FCAN, CNDA, EWCS, CNPF, CAD.
Sep. 15, 2013, 8:37 PM
- S&P 500 (SPY) futures +1.1% following Larry Summers pulling out of the race to be Fed chief. Nasdaq 100 (QQQ) and DJIA (DIA) +1%.
- 10-year Treasury futures are up nearly a full point, translating into about a 10 basis point dip in the 10-year Treasury yield, which closed Friday at 2.88%.
- Eurodollar futures are partying, the December 2016 contract up a full 17 basis points - in other words, nearly one 25 basis point Fed rate hike has been erased on the Summers news. Still, at 97.33, the Dec. 2016 contract is pricing in nearly 250 bps in hikes between now and then. The Eurodollar market has always been a great repository of market angst, and to say the taper and Summers were making players nervous would be putting it mildly.
- The greenback is lower across the board, down about half a percent vs. the euro (FXE), pound (FXB), yen (FXY), swissie (FXF), and loonie (FXC), and off a full percent vs. the aussie (FXA).
- Precious metals are on the move as well, gold +1.7% to $1,330 per ounce, and silver +2.5% to $22.25.
- Stock index ETFs: IVV, SPY, VOO, RWL, SFLA, SSO, UPRO, SDS, SPXU, SH, EPS, RSP, BXUB, BXUC, BXDB, DIA, DDM, UDOW, DXD, SDOW, DOG, IWM, VTWO, EWRS, SRTY, TWM, RWM, TNA, URTY, UWM, TZA, SMLV, TWOK.
- Long-dated Treasury ETFs: TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, DSTJ, DSXJ, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.
- Dollar ETFs: UUP, UUPT, UDN, UDNT.
- Short-duration Treasury ETFs: SHY, SHV, IEI, BIL, TUZ, FIVZ, DTUL, VGSH, DTUS, DFVS, DFVL, SST, ISTB, TBZ.
- Related currency ETFs: ERO, ULE, URR, EUO, DRR, EUFX, GBB, YCL, YCS, JYN.
- Precious metals ETFs: GLD, IAU, SGOL, PHYS, AGOL, DGL, UBG, DGP, UGL, DZZ, GLL, DGZ, UGLD, DGLD, GLDI, SLV, SIVR, AGQ, DBS, USV, ZSL, USLV, DSLV, SLVO.
Sep. 6, 2013, 9:03 AM
- Canada added 59K jobs in August, nearly tripling expectations of 20K. The unemployment rate fell to 7.1% from 7.2%. Over the last 6 months, employment gains have average 12K/month vs. 29K/month in the preceding six month period.
- The loonie parties, +1% and buying $0.9613. FXC +0.8% premarket.
- Canada-related ETFs: EWC, FCAN, CNDA, EWCS, CNPF, CAD.
Sep. 4, 2013, 10:22 AM
- As expected, the bank leaves its benchmark overnight rate at 1%. The "dynamic" of global expansion has moderated, goes the statement.
- "Uncertain global economic conditions appear to be delaying the anticipated rotation of demand in Canada towards exports and investment."
- The loonie is trading a bit stronger than before the announcement and buying $0.9530. FXC +0.15%.
- Canada ETFs: EWC, FCAN, CNDA, EWCS, CNPF, CAD.
Aug. 30, 2013, 9:10 AM
- June GDP contracted by 0.5% against expectations for -0.4% and +0.2% in May. For all of Q2, GDP grew at an annualized pace of 1.7% vs. 2% expected and 2.2% (revised from 2.5%) in Q1.
- The loonie (FXC) adds about 15 pips on this seriously aged data, now unchanged on the session and buying $0.9494.
- Canada ETFs: EWC, FCAN, CNDA, EWCS, CNPF, CAD.
Aug. 28, 2013, 7:38 AM
- The 10-year yield fell to as low as 2.70% overnight, but is currently 3 bps above yesterday afternoon at 2.74%. TLT -0.4% premarket.
- Europe's off moderately and Asia fell inline with yesterday's decline in the U.S., but crude oil surged more than $3 per barrel to $112 before falling back to just above $109 at the moment.
- The dollar (UUP) is stronger across the board, with the euro (FXE), cable (FXB), yen (FXY), swissie (FXF), and loonie (FXC) all off somewhere in the area of 0.5% against the greenback. As is typical of late, the aussie's (FXA) decline is somewhat higher, -0.8%.
- Other dollar ETFs: UUPT, UDN, UDNT.
- Related currency ETFs: ERO, ULE, URR, EUO, DRR, EUFX, GBB.
- Treasury ETFs: TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, DSTJ, DSXJ, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.
Aug. 27, 2013, 7:49 AM
- Moving along with the precious metals over Syrian tension is crude oil, with both WTI crude (USO) and Brent (BNO) up more than 1.6%. WTI at $107.50 per barrel is threatening to take out levels last seen in the Spring of 2011.
- The greenback is also catching a bid, moderately higher against the euro (FXE), cable (FXB), and the loonie (FXC), but sharply higher vs. the aussie (FXA). The dollar is losing a good bit of ground against the yen (FXY), and off just a bit vs. the Swiss franc (FXF).
- Dollar ETFs: UUP, UUPT, UDN, UDNT.
- Related currency ETFs: FXE, ERO, ULE, URR, EUO, DRR, EUFX, GBB, YCL, YCS, JYN.
- Oil ETFs: OIL, USO, DBO, OLO, USL, CRUD, UCO, DTO, SCO, SZO, DNO, UWTI, DWTI, BNO, UOIL, DOIL.
Aug. 26, 2013, 4:21 AM
- Forex reserves have been falling at Asian banks as they have attempted - not so successfully - to bolster their weakening currencies, which have been suffering partly from the Fed's talk of tapering. Six out of the 10 banks with the largest holdings have cut their reserves this year.
- The Bank of Indonesia's holdings have plunged a record 18% in 2013, while the rupiah has dropped 12%. The Reserve Bank of India's holdings have fallen 4% as the rupee has dropped 12%.
- The trends threaten currencies that central banks bought as they looked to diversify their reserves beyond the U.S. dollar in past years, including the euro, the Swedish krona, the Norwegian krone, the South Korean won, and the Australian and Canadian dollars.
- ETFs: CEW, AYT, JEM, PGD, FXE, ERO, ULE, URR, EUO, DRR, EUFX, ICN, INR, FXA, GDAY, CROC, FXC, FXS,
Aug. 15, 2013, 4:38 PM
- Rising rates, the decline in stocks, and escalating violence in Egypt provided no bid for the greenback which fell across the board today.
- The dollar (UUP -0.7%) lost more than 1% against the Swiss franc (FXF +1%) and nearly 1% vs. the yen (FXY +0.8%) and cable (FXB +0.9%). The euro (FXE +0.7%) gained nearly three quarters of one percent.
- Typically the first to sell off when markets get a bit panicky, even the loonie (FXC +0.2%) and the aussie (FXA) picked up ground against the U.S. unit.
- A reason? Maybe the commodity sector (DBC +1%) - it was notably strong with metals, energy, and the grains all higher.
- Related dollar ETFs: UUPT, UDN, UDNT.
- Broad commodity ETFs: DJP, GSP, LSC, RJI, GSC, GCC, GSG, DBC, DPU, DJCI, UCI, USCI, DYY, UCD, DEE, CMD, DDP, RGRC, CTF, CFD CSCR, CSCB.
Jul. 17, 2013, 10:12 AMThe Bank of Canada maintains its benchmark lending rate at 1% following the first policy meeting headed by new Governor Stephen Poloz. The statement leans dovish, noting inflation has been low and is "expected to remain subdued." The loonie (FXC -0.5%) takes a sizable dip, now buying $0.9615. Canadian stocks (EWC +0.3%) gain in early trade. Poloz's press conference is set for 11:15 ET. | Comment!
Jul. 8, 2013, 9:35 AMThe struggling loonie (FXC) should be about done going down and could rise back to parity with the greenback in 2014, according to CIBC. The loonie has slid along with the aussie (FXA) this year thanks to disappointing global growth and the fall in commodity prices, but that's where the comparison ends, says CIBC. The countries are at different stages of the business cycle and each with a different export focus: Oz is China, meaning iron ore and coal, and Canada more tied to oil, vehicles, parts, and machinery. | Comment!
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