USD/CAD Fundamental Analysis October 31, 2014 Forecast

Analysis and Recommendations:

The USD/CAD added 5 points as the greenback continued to rally on positive news from the US Fed and the CAD remained weak as oil and gold prices continued to decline. The Federal Reserve said it sees further improvement in the labor market while confirming it will end an asset-purchase program that has added $1.66 trillion to its balance sheet.

The dollar surged to a three-week high, bond yields rose and gold fell on Thursday after the U.S. Federal Reserve ended its six-year quantitative easing bond-buying program.

The decision was widely expected, but a relatively hawkish tone to the accompanying statement was not. It prompted financial markets to rethink the growing consensus that the Fed’s first interest rate hike would be late in 2015.

Stock market reaction was more mixed. Asian shares mostly fell, following a slight decline on Wall Street overnight. European bourses opened higher on Thursday, helped by encouraging corporate earnings, but quickly turned negative.

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 actual vs. forecast:

               Cur.                       Event     Actual    Forecast              Previous

                 AUD                    HIA New Home Sales       0.0%                    3.3%     

                 GBP                     Nationwide HPI (YoY)      9.0%      8.5%      9.4%     

                 GBP                     Nationwide HPI (MoM)   0.5%      0.3%      -0.1%    

                 GBP                     MPC Member Cunliffe                                                   

                 EUR                    Spanish GDP (QoQ)           0.5%      0.5%      0.6%     

                 EUR                    German Unemployment                -22K       5K           9K          

                 EUR                    German Unemployment                6.7%      6.7%      6.7%     

                 USD                    GDP (QoQ) (Q3)                                3.0%      4.6%     

                 USD                    GDP Price Index (QoQ)                   2.0%      2.1%     

                 USD                    Initial Jobless Claims                      283K      283K     

                 USD                    Fed Chair Yellen Speaks          

                                                    

 

Upcoming Economic Events that you should be monitoring:

               Cur.                       Event     Actual    Forecast              Previous

                 JPY                      Household Spending                      -4.3%     -4.7%    

                 JPY                      National Core CPI (YoY)                3.0%      3.1%     

                 JPY                      Tokyo Core CPI (YoY)                      2.5%      2.6%     

                 AUD                    PPI (YoY) (Q3)                                  2.3%     

                 AUD                    PPI (QoQ) (Q3)                                 -0.1%    

                 AUD                    Private Sector Credit                       0.4%      0.4%     

                 JPY                      BoJ Press Conference                                                    

                 EUR                    German Retail Sales                        -1.0%     2.5%     

                 EUR                    French Consumer                            -0.3%     -0.7%    

                 EUR                    Italian CPI (MoM)                            -0.2%     -0.4%    

                 EUR                    Core CPI (YoY) (Oct)                        0.8%      0.8%     

                 EUR                    CPI (YoY) (Oct)                  0.4%      0.3%     

                 EUR                    Unemployment Rate                      11.5%    11.5%   

                 USD                    Core PCE Price Index                                     1.5%     

                 CAD                    GDP (MoM) (Aug)                            0.0%      0.0%     

                 USD                    Chicago PMI (Oct)                          60.0       60.5      

                 USD                    Michigan Consumer                       86.4       86.4      

Government Bond Auction

Date Time Country Auction

Oct 30 10:10 Italy BTP/CCTeu auctions

Oct 30 17:00 US Usd 29bn 7Y Notes

Nov 03 10:00 Norway T-bill auction

Nov 04 10:15 Austria RAGB auction

Nov 04 10:30 Belgium 3 & 6M T-bill auction (Feb & Apr 2015)

Nov 04 10:30 UK Auctions 0.5% 2050 I/L Gilt

Nov 05 10:30 Germany Eur 4.0bn Oct 2019 Bobl auction

Nov 06 09:30 Spain Bono/Obligacion auction

Nov 06 10:03 Sweden I/L bond auction

Nov 06 11:00 Norway Announces details of bond auction on Nov 11

Nov 07 16:30 Italy Announces details of BOT auction on Nov