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USD/CAD Fundamental Analysis – November 5, 2015 – Forecast

Barry Norman

Analysis and Recommendations:

The USD/CAD gained 6 points to 1.3066 as the Loonie gained momentum on the climb in oil prices which helped it combat the rising US dollar.  Traders see a 52 percent chance the Fed will boost interest rates from near zero by its December meeting, up from 34 percent odds on Oct. 26, the day before the central bank last met. The calculations are based on the assumption the effective fed funds rate will average 0.375 percent after the first increase, compared with the current range of zero to 0.25 percent.

Fed officials scheduled to speak on Wednesday include Yellen, Vice Chairman Stanley Fischer and New York Fed President William C. Dudley.

Robust employment figures from the United States will confirm the resilience of the rebound by the world’s top economy and further raise the likelihood that its central bank will finally lift interest rates at its December policy meeting.

Investors shrugged off China’s services sector data which came in relatively stronger, easing concerns over persistent weakness in the economy.

“The main focus will be on the U.S. ISM (non-manufacturing) number, this afternoon. U.S. trade data as well as the ADP employment report — the latter acting as a guide for the official payroll report,” Rand Merchant Bank currency strategist John Cairns said.

A likely strong labour momentum will be enough for the Fed to consider an interest rate hike this year

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Today’s economic releases:

Cur.

 

Event

Actual

Forecast

Previous

 

  USD

 

API Weekly Crude Oil Stock

2.800M

 

4.100M

 

 

  NZD

 

Employment Change (QoQ) (Q3)

-0.4%

0.4%

0.1%

   

  NZD

 

Unemployment Rate (Q3)

6.0%

6.0%

5.9%

 

 

  AUD

 

Retail Sales (MoM) (Sep)

0.4%

0.4%

0.4%

 

 

  AUD

 

Trade Balance (Sep)

-2.317B

-3.000B

-2.711B

   

  CNY

 

Caixin Services PMI (Oct)

52.0

50.8

50.5

 

 

  EUR

 

German Services PMI (Oct)

54.5

55.2

55.2

 

 

  EUR

 

ECB President Draghi Speaks  

 

 

 

 

 

  EUR

 

Markit Composite PMI (Oct)

53.9

54.0

54.0

 

 

  EUR

 

Services PMI (Oct)

54.1

54.2

54.2

 

 

  GBP

 

Services PMI (Oct)

54.9

54.5

53.3

 

 

  USD

 

FOMC Member Brainard Speaks 

 

 

 

 

 

  USD

 

ADP Nonfarm Employment (Oct)

 

180K

200K

   

 

Upcoming Economic Events that you should be monitoring:

Wednesday, November 4, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

  AUD

 

RBA Governor Stevens Speaks  

 

 

 

 

 

  JPY

 

Monetary Policy Meeting Minutes

 

 

 

 

 

  USD

 

FOMC Member Stanley Fischer 

 

 

 

 

 

  EUR

 

German Factory Orders (MoM) (Sep)

 

1.0%

-1.8%

 

 

  EUR

 

ECB Economic Bulletin  

 

 

 

 

 

  EUR

 

Retail Sales (MoM) (Sep)

 

0.2%

0.0%

 

 

  EUR

 

ECB President Draghi Speaks  

 

 

 

 

 

  GBP

 

Interest Rate Decision (Nov)

 

0.50%

0.50%

 

 

  GBP

 

BoE MPC Meeting Minutes

 

 

 

 

 

  GBP

 

BoE Gov Carney Speaks  

 

 

 

 

 

  USD

 

FOMC Member Dudley Speaks  

 

 

 

 

 

  USD

 

Initial Jobless Claims

 

262K

260K

 

 

  USD

 

Unit Labor Costs (QoQ) (Q3)  

 

2.3%

-1.4%

 

 

  USD

 

FOMC Member Stanley Fischer 

 

 

 

 

 

  USD

 

FOMC Member Lockhart Speaks 

 

 

 

   

Government Bond Auctions

Date Time Country

Nov 03 10:10 Austria Holds RAGB bond sale

Nov 04 15:30 Sweden Announces details of Bond on 11 Nov

Nov 04 N/A Holland Announces details of Bond on 10 Nov

Nov 05 09:30 Spain Auctions Bonos

Nov 05 09:50 France Auctions OATs

Nov 05 10:03 Sweden Holds I/L bond auction

Nov 09 12:00 Norway Details bond auction on 11 Nov

Nov 09 15:30 Italy Announces details of BTPs/CCTeu on 12 Nov

Nov 09 N/A US Holds 3-year note auction

Nov 10 10:30 UK 0.125% 2058 I/L Gilt auction

Nov 10 N/A Holland Eur 2.0-3.0bn 0% Apr 2018 DSL

Nov 10 N/A US Holds 10-year note auction

Nov 11 10:03 Sweden Holds bond auction

Nov 11 11:15 Norway Holds bond auction

Nov 11 10:30 Germany Eur 3bn 0.25% Oct 2020 Bobl

Nov 12 10:10 Italy Auctions BTPs/CCTeus

Nov 12 10:30 UK 4.25% 2039 Gilt auction

Nov 12 N/A US Holds 30-year bond auction

 

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