Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Trader Strategy
Access all our platforms from a single account.
These birds of a feather don’t stick together
Michael O’Neill
FX Trader, Loonieviews.net
Summary: The Canadian and Australian dollars went their separate ways today, each because of news on the inflation front. Meanwhile, equities shed their initial China-inspired gains when disappointment over Netflix filtered through.
The loonie and kiwi are a couple of birds with a glaring difference - the loon can fly and the kiwi cannot. That difference was on full display today. Kiwi face-planted after weaker than expected New Zealand inflation data while the loon soared when Canadian inflation beat expectations.
Statistics Canada reported that CPI rose 1.9% in March, year over year, well above the 1.5% level recorded in February. However, CPI excluding energy rose 2.2%. At the same time, Canada’s trade deficit narrowed in February and the January deficit was revised down as well. The news knocked USDCAD from 1.3338 to 1.3270. Prices bounced to 1.3338 as of 1410 GMT, due to a drop in WTI oil prices and the better than expected US trade data, which underpinned the greenback.
USDCAD is underpinned bullish technicals and a dovish Bank of Canada monetary policy outlook. Fibonacci support is at 1.3270 which represents the 50% retracement level of the February/March range. Prices continue to gravitate around the 100-day moving average at 1.3333. However, expectations for a Canadian growth rebound in Q2 and steady to high oil prices are capping topside moves.
The US goods and services deficit narrowed 3.46% to $49.4 billion in February which is an eight-month low. Some economists expect today’s data to contribute to a 1% jump in Q1 GDP which gave a bid to the US dollar.
The greenback is trading close to unchanged since New York opened against most of the major G10 currencies with AUDUSD and NZDUSD losing ground.
Statistics Canada reported that CPI rose 1.9% in March, year over year, well above the 1.5% level recorded in February. However, CPI excluding energy rose 2.2%. At the same time, Canada’s trade deficit narrowed in February and the January deficit was revised down as well. The news knocked USDCAD from 1.3338 to 1.3270. Prices bounced to 1.3338 as of 1410 GMT, due to a drop in WTI oil prices and the better than expected US trade data, which underpinned the greenback.
USDCAD is underpinned bullish technicals and a dovish Bank of Canada monetary policy outlook. Fibonacci support is at 1.3270 which represents the 50% retracement level of the February/March range. Prices continue to gravitate around the 100-day moving average at 1.3333. However, expectations for a Canadian growth rebound in Q2 and steady to high oil prices are capping topside moves.
The US goods and services deficit narrowed 3.46% to $49.4 billion in February which is an eight-month low. Some economists expect today’s data to contribute to a 1% jump in Q1 GDP which gave a bid to the US dollar.
The greenback is trading close to unchanged since New York opened against most of the major G10 currencies with AUDUSD and NZDUSD losing ground.
Wall Street opened with a bit of a pop, thanks to the earlier China data, but prices quickly deflated in early trading. Traders were not overly thrilled by quarterly reports from Netflix, (NFLX) which is down 1.34% or IBM which sank 5.22% in early trading. It wasn’t all bad news. Morgan Stanley (MS: NYSE) beat profit and revenue estimates and its shares are up 1.0%.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
China Outlook: The choice between retaliation or de-escalation
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: A bumpy road ahead calls for diversification
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX outlook: Tariffs drive USD strength, until...?
John J. Hardy
Global Head of Trader Strategy
-
Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...