News & Analysis

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Loonie slides as commodity currencies lead losses vs USD

Loonie slides as commodity currencies lead losses vs USD

Traders exposed to commodity currencies such as CAD will be keeping a close eye on geopolitical developments this week, while CAD traders specifically will be focusing on the BoC this Wednesday and its updated monetary policy report. read more

Loonie looks to commodity markets as Russia-Ukraine poses threat to stability in WTI

Loonie looks to commodity markets as Russia-Ukraine poses threat to stability in WTI

Traders exposed to commodity currencies such as CAD will be keeping a close eye on geopolitical developments this week, while CAD traders specifically will be focusing on the BoC this Wednesday and its updated monetary policy report. read more

Hawkish hints eyed at next week’s FOMC and BoC meeting for guidance on lift-off

Hawkish hints eyed at next week’s FOMC and BoC meeting for guidance on lift-off

Policy expectations will continue to drive markets with the Federal Reserve and the Bank of Canada set to release their latest policy decisions. Both central banks are on the more hawkish side of the spectrum given their robust economic outlook. read more

Weaker crude prices undermine the loonie ahead of Canadian retail sales

Weaker crude prices undermine the loonie ahead of Canadian retail sales

Today, focus will be on Canadian retail sales from November which are set to have stabilised at 1.2% MoM after October’s 1.6% increase, however, the softer oil prices and nearing FOMC and BoC meetings may make it difficult to break current trends in USDCAD. read more

Canadian CPI fails to change USDCAD trend, while oil remains in focus

Canadian CPI fails to change USDCAD trend, while oil remains in focus

USDCAD put in a fresh low in yesterday’s trading session after the release of the Canadian CPI report but rose back to previous levels immediately afterwards. This may have been a case of “buy the rumour, sell the fact” dynamics playing out as the inflation figures printed in line with median estimates. read more

BRL Outlook: Hawkish BCB to offset depreciation, but political risks may tip the balance

BRL Outlook: Hawkish BCB to offset depreciation, but political risks may tip the balance

As the year progresses, the Brazilian general elections that are set to be held in October will become increasingly relevant for FX markets given the real’s reputation of weakening in times of political uncertainty and upcoming elections. read more

UK inflation surprises to the upside, but pound’s reaction remains muted

UK inflation surprises to the upside, but pound’s reaction remains muted

The UK’s CPI inflation figures came in stronger than expected on Tuesday, with the YoY headline figure printing at 5.4% vs the 5.2% estimated, while the MoM print dropped to 0.5% from last month’s 0.7% - albeit above the 0.3% expected. read more

Loonie rises as pipeline explosion bolsters fears around tight supply

Loonie rises as pipeline explosion bolsters fears around tight supply

The Canadian dollar saw a stark rebound against the US dollar in yesterday’s latter part of the trading session as a crude pipeline running from Iraq to Turkey was hit by an explosion, supporting crude oil prices. read more

Loonie supported by higher oil and record highs in Bank of Canada business outlook

Loonie supported by higher oil and record highs in Bank of Canada business outlook

This morning, the bout of USD strength also meant the loonie lost some of its shine, but it remains one of the better performers across the G10. As for oil markets, signs of consumption holding up despite the spread of the Omicron variant had already underpinned prices. read more

USD Outlook: Factoring in the stall in hawkish Fed pricing

USD Outlook: Factoring in the stall in hawkish Fed pricing

Since the Federal Reserve’s December meeting, the DXY index has fallen by 1.5% despite data released over the same timeframe for December showing the unemployment rate falling below 4% and inflation data rising to a near 40-year high. read more

Crude oil prices put a floor under CAD amid stronger US dollar

Crude oil prices put a floor under CAD amid stronger US dollar

As for data this week, today’s Bank of Canada Business Outlook Survey for Q4 will be watched by markets and should be one of the most optimistic central bank reports in the G10 given the fast recovery in the labour market along with strong activity indicators. read more

Central banks coming back into focus after slow January start

Central banks coming back into focus after slow January start

the theme of monetary policy extends with the Bank of Japan, Norges Bank and the CBRT set to announce their latest decisions. All three are expected to keep policy on hold, however language from policymakers will be key to any potential volatility in the marketplace. read more

Loonie will look to close the week at fresh highs should US retail sales data disappoint

Loonie will look to close the week at fresh highs should US retail sales data disappoint

Over the course of the week so far, CAD has posted gains in excess of a percentage point despite Monday’s equity induced weakness. Today, in lieu of any Canadian economic events, attention will be on US retail sales for December at 13:30 GMT. read more

UK economy finally recovers to above pre-pandemic levels of output

UK economy finally recovers to above pre-pandemic levels of output

Today's release of UK GDP data for November saw economic activity more than double the consensus estimate with a print of 0.9% MoM. In addition to this, October’s monthly GDP reading was revised upwards from 0.1% to 0.2%. read more

Loonie trades back to levels not seen since October’s US CPI report was released

Loonie trades back to levels not seen since October’s US CPI report was released

This morning, the loonie sits marginally higher against the dollar as its spot level trades around rates last seen in mid-November before the October US CPI report sent the US dollar higher. read more

Monex’s 12 key market themes for 2022

Monex’s 12 key market themes for 2022

Trade ideas tend to have a short shelflife in today's market, so instead of issuing trade suggestions for 2022, we have opted to outline the main themes we think will dominate market price action in the coming 12 months. read more

US inflation near 40-year high, but financial markets are underwhelmed

US inflation near 40-year high, but financial markets are underwhelmed

Despite the US CPI release showed that headline inflation is sitting at its highest point since June 1982, the reaction in the Treasury market was counterintuitive and the dollar sold-off against its G10 peers. read more

Loonie hits 8-week high following a stabilisation in equities and rise in WTI to above $80

Loonie hits 8-week high following a stabilisation in equities and rise in WTI to above $80

The Canadian dollar enjoyed Powell’s commentary at yesterday’s Senate banking hearing as the Chair’s lack of explicit policy guidance underdelivered relative to the market’s hawkish pricing of policy this year. read more

Loonie retraces yesterday’s losses as equities recover and sentiment stabilises

Loonie retraces yesterday’s losses as equities recover and sentiment stabilises

The Canadian dollar fared well in yesterday’s risk-off market as it fell only 0.27% against the greenback. This morning, as risk conditions stabilise, the loonie has fully retraced those losses and is back to trading at the top of its recent range against the dollar. read more

Loonie in tight ranges as traders await North American open

Loonie in tight ranges as traders await North American open

This morning, with events light for the loonie this week, the currency is trading relatively flat along with US equity futures despite the rise in US yields again this morning. read more

Inflation is back in focus after a week of rising bond yields

Inflation is back in focus after a week of rising bond yields

Next week (10th - 14th January), inflation data will be the focus and key for market pricing of rates, but it isn’t a given that this will bring about volatility in the FX space. read more

US and Canadian labour market reactive

US and Canadian labour market reactive

Expectations for today’s US payrolls data were high after multiple sell-side forecasters revised their projections for the net employment figure upwards following the higher ADP and Homebase data from earlier in the week. read more

FOMC meeting minutes strike hawkish tone, but it’s one for the fixed income traders

FOMC meeting minutes strike hawkish tone, but it’s one for the fixed income traders

It seems today's FOMC meeting minutes is one for the fixed income traders as opposed to the FX space. For FX markets, the impact of today’s meeting minutes will likely play out over the course of the week, especially as December’s jobs data is released on Friday following bumper ADP and Homebase indicators earlier in the week. read more

Loonie is back in range ahead of crucial North American labour market data

Loonie is back in range ahead of crucial North American labour market data

The loonie tracked the progress of the recovery in the S&P 500 index throughout the bulk of yesterday’s trading session following the decline in North American equities after Wednesday’s release of December's FOMC meeting minutes. read more

Loonie remains under pressure as greenback goes bid across the G10

Loonie remains under pressure as greenback goes bid across the G10

The Canadian dollar was one of the only G10 currencies to feel the pinch in the immediate aftermath of the FOMC meeting minutes, with the loonie dropping 0.36% against the dollar over the course of the day. read more

All eyes on FOMC minutes as Treasuries rebound

All eyes on FOMC minutes as Treasuries rebound

Price action in USDCAD was predominantly driven by USD dynamics in yesterday’s session. Focus is likely to remain on USD dynamics, especially pricing in the US bond market, as FOMC meeting minutes are released this evening. read more

Loonie shielded by stronger crude prices ahead of OPEC+ meeting

Loonie shielded by stronger crude prices ahead of OPEC+ meeting

Today’s OPEC+ meeting will be crucial to watch for commodity watchers and CAD traders, especially in light of the damaged pipeline situation in Libya. Markets expect the cartel to stick to existing policy in today’s meeting, which means output is set to be hiked by another 400,000 barrels a day from the start of February. read more

Loonie retraces gains amid Omicron fears, all eyes on Friday’s labour data

Loonie retraces gains amid Omicron fears, all eyes on Friday’s labour data

Virus conditions will be watched throughout the first half of the week while on Friday, markets turn to the Nonfarm Payrolls report which could support the dollar further if the release reflects stronger underlying growth momentum domestically amid global worries around Covid.  read more

Monex January 2022 FX Forecasts

Monex January 2022 FX Forecasts

Looking ahead to 2022, our forecasts have been adjusted to take into account the new sensitivities of central banks to inflation, continuing virus risks and the likely slowdown in growth in Q1. Omicron risk continues to dominate as policymakers conduct a balancing act in order to mitigate the health and economic impacts. read more

Loonie looks to stabilise at the low 1.28’s as liquidity dries up for Christmas

Loonie looks to stabilise at the low 1.28’s as liquidity dries up for Christmas

The dollar weakened further across the board in yesterday’s session as the risk-on mood in markets extended following more optimistic Covid headlines while equities surged, with the S&P 500 hitting another all-time high. read more

Loonie traders turn to October GDP for final data release of the year

Loonie traders turn to October GDP for final data release of the year

Before the data calendar empties until the new year, market participants can expect the release of Canada's October’s GDP data which is released at 13:30 GMT. read more

Markets start to dull down as data calendar dries up

Markets start to dull down as data calendar dries up

For the Canadian dollar today, focus will be on EIA US oil inventories data which will be released at 15:30 GMT before tomorrow’s release of October’s GDP finishes off the data calendar for the year.  read more

Loonie hits one-year low yesterday as market sentiment crumbles

Loonie hits one-year low yesterday as market sentiment crumbles

With concerns over the global health backdrop weighing on risk sentiment across markets yesterday, the loonie continued to be offered against the US dollar as markets sought security from the potential slowdown in economic activity. read more

Winding down for Christmas, yeah

Winding down for Christmas, yeah

Next week (20th - 24th December), despite the odd pieces of data set for release, economic events are unlikely to be too market moving with liquidity set to dry up as traders trim positions heading into year-end. read more

Euro takes joy in ECB decision despite the modest bridge between PEPP and APP

Euro takes joy in ECB decision despite the modest bridge between PEPP and APP

The ECB decided on a monthly net purchase pace of €40bn in Q2 and €30bn in Q3 under APP before the more traditional QE vehicle resets at a pace of €20bn from Q4 onwards. read more

Bank of England gives way to inflationary pressure and hikes rates by 15bps

Bank of England gives way to inflationary pressure and hikes rates by 15bps

The Bank of England surprised market participants today by voting 8-1 to raise rates by 15bps to 0.25%, and has effectively announced the start of their hiking cycle in spite of the growth risks. read more

Fed’s sensitivity to inflation overshoot begins to show as 3 rate hikes signalled next year

Fed’s sensitivity to inflation overshoot begins to show as 3 rate hikes signalled next year

The shock delivered by today’s Federal Reserve decision came in the form of the dot plot, which now foresees 3 rate hikes in 2022, up from just half a rate hike signalled in September’s projections. read more

Loonie falls after the BoC renews its inflation mandate with a twist

Loonie falls after the BoC renews its inflation mandate with a twist

CAD was under pressure for most of yesterday’s session as the fall in oil amid a risk-off market resulted in commodity currencies selling off across the board. The loonie also faced its own challenge as the Bank of Canada released the details of its inflation framework review. read more

UK labour market shows limited impact of furlough expiry but data does little for markets as BoE hamstrung by Omicron 

UK labour market shows limited impact of furlough expiry but data does little for markets as BoE hamstrung by Omicron 

Despite concerns of a disruptive removal of fiscal support, today’s UK employment data shows a fairly smooth impact of the end of the furlough scheme. The unemployment rate declined from 4.3% to 4.2% in the 3-months up until October. read more

Bank of Canada formalises its implicit employment goal in new inflation mandate

Bank of Canada formalises its implicit employment goal in new inflation mandate

While today’s announcement falls in line with what economists were largely expecting and is merely a formalisation of the mandate that has been in practice since the onset of the pandemic, it is being viewed as a marginal dovish development by markets. read more

Omicroncerns clouding the monetary outlook ahead of year end

Omicroncerns clouding the monetary outlook ahead of year end

Next week’s (13th - 17th December) calendar includes nine central banks scheduled to announce their policy decisions, which means FX volatility is likely to pick up. All of which are likely to be clouded by concerns over the impact of the Omicron variant. read more

Loonie traders turn to Gravelle’s economic assessment 

Loonie traders turn to Gravelle’s economic assessment 

For today, the emphasis is on Deputy Gravelle’s economic assessment for further guidance on the economic outlook at 18:00 GMT, especially as yesterday’s meeting came without a press conference.  read more

Bank of Canada flags desire to hike rates, but growth risks keep them noncommittal 

Bank of Canada flags desire to hike rates, but growth risks keep them noncommittal 

CAD mildly weakend on the back of the release as there was no material upgrade to the Bank’s October projections in the statement. However, the brief spike in USDCAD after the announcement was quickly retraced. read more

Tight labour market brings focus back to Bank of Canada

Tight labour market brings focus back to Bank of Canada

The rapid tightening of the labour market in Canada could see the Bank of Canada turn more hawkish in the year to come, especially if wages continue to rise sharply along with inflation. read more

BoC and NBP to keep markets busy ahead of US CPI

BoC and NBP to keep markets busy ahead of US CPI

Next week’s (6th - 10th November) calendar includes a BoC meeting and an NBP meeting, along with several CPI releases including the US. While the BoC is expected to hold fire on Wednesday, Thursday’s speech from BoC Deputy Governor Gravelle will be heavily watched. read more

Diverging labour market progress in US and Canada brings back volatility in FX markets

Diverging labour market progress in US and Canada brings back volatility in FX markets

Volatility in FX markets after the US and Canada jobs reports made up for the lack of price action in the first part of the day. CAD strengthened to session highs on the back of the data, while USD saw opposite moves. read more

Monex December 2021 FX Forecasts

Monex December 2021 FX Forecasts

The Omicron variant has certainly thrown another spanner in the works for our currency forecasts. With little information known about the efficacy rate of vaccines against the Omicron variant and therefore the impact it will have on global growth, we project our near-term forecasts based on the scenario of no substantial deterioration in Covid conditions towards year-end. read more

Upside in Canadian GDP unlikely to change Bank of Canada’s course

Upside in Canadian GDP unlikely to change Bank of Canada’s course

With growth still printing closer to the BoC’s expectations in Q3 than initially thought following August’s preliminary reading, and the preliminary reading for October showing a pick-up in sequential activity to 0.8% MoM, the report was positive on the whole. read more

Covid concerns re-emerge, payrolls data pivotal for December Fed

Covid concerns re-emerge, payrolls data pivotal for December Fed

Next week's focus largely sits on Friday’s Nonfarm payrolls data. Outside of economic data, news about the spread, transmissibility and reduced vaccine efficacy of the new Covid strain from South Africa will prove highly influential for market risk appetite. read more

Lower growth profile and rising US yields call for downgraded EUR calls

Lower growth profile and rising US yields call for downgraded EUR calls

In November, significant downside risks to our November forecasts materialised, with growth concerns and rising US yields pushing EURUSD down from 1.16 to the 1.12 level. Growth concerns arose as some eurozone countries went into light lockdowns. read more

Loonie hits 7-week low as oil markets tumble and US 2-year rises

Loonie hits 7-week low as oil markets tumble and US 2-year rises

The Canadian dollar continues to slide against its US counterpart as US equities print in the red, oil markets continue to slump on news of more strategic reserve drawdowns. read more

November flash PMI beat fails to invigorate pound like it did the euro

November flash PMI beat fails to invigorate pound like it did the euro

Following on from this morning’s eurozone PMI beat and the subsequent EURUSD rally, all eyes rested on the UK flash November PMI data and whether the pound would find a similar tailwind. read more

Loonie little impacted by news that Japan may join US in releasing oil reserves

Loonie little impacted by news that Japan may join US in releasing oil reserves

The Canadian dollar remains little impacted by the decline in oil markets over the past 36 trading hours, with oil hovering around $76 per barrel following the news that Japan may join the US and China in tapping their petroleum reserves in order to lower energy costs. read more

Projected rate paths are key for NZD and SEK

Projected rate paths are key for NZD and SEK

Next week (22nd - 26th November), focus remains on how markets price central bank tolerances to inflation and global growth conditions as Covid cases begin to rise and force major nations to impose tighter containment measures. read more

Loonie stabilises as oil pressure moderates

Loonie stabilises as oil pressure moderates

A stabilisation in oil markets yesterday helped the loonie stem its losses and stabilise around lows not seen since early October. With crude now sitting just shy of $80 per barrel again, the Canadian dollar might start retracing recent losses. read more

Canadian CPI meets expectations at a record 4.7% YoY 

Canadian CPI meets expectations at a record 4.7% YoY 

Today’s CPI release for October saw headline print at 4.7% YoY in October, up from 4.4% in September and in line with the consensus expectation. This marks a 0.7% MoM NSA growth in prices in October, while the average of the core measures held steady at 2.67%. read more

UK CPI, labour market data keep BoE on track for December hike

UK CPI, labour market data keep BoE on track for December hike

UK CPI massively outstripped expectations to print at its highest 12-month rate since December 2011, and the month-on-month change saw the pace of price increases reach a high not seen since April 1993. While today’s data exceeded the consensus estimate from economists, it is broadly in line with the BoE’s projections, which envisage CPI peaking at 5% in April 2022 when Ofgem adjusts its price cap again. read more

EURUSD reaches 16-month lows amid US rates and renewed restrictions

EURUSD reaches 16-month lows amid US rates and renewed restrictions

After the euro fell to a 16-month low against the dollar during the latter part of yesterday’s trading session due to a steepening in the US yield curve, the pair continued to tumble this morning as renewed Covid restrictions in European countries and headlines around the Nord Stream 2 pipeline threaten growth conditions in the bloc. read more

UK labour market: First paving stone laid for the path to a December rate hike

UK labour market: First paving stone laid for the path to a December rate hike

While the latest labour market report doesn’t highlight the full impact of furlough schemes expiry on the labour market, the data is strong across a variety of lagged and real-time metrics and therefore highlights a robust labour market heading into the transition period. In the quarter up until September, 247,000 jobs were added, driven by a record high net flow from unemployment to employment, while 213,000 of those jobs were added in September alone. read more

GBP Outlook: Waiting for the break in the clouds

GBP Outlook: Waiting for the break in the clouds

With GBPUSD trading some distance from our 1-month target of 1.38, we have downgraded our end of month call to 1.3550 while maintaining our end of year call at 1.38. Our bullish medium-term GBP view remains on track despite the near-term hurdles for reasons including supportive valuation, a progressive hiking cycle by the BoE that has been underpriced in FX markets following the November meeting, and our expectation that the Fed will push back on market expectations again at the margin. read more

Loonie recovers from Friday’s lows despite lower oil prices

Loonie recovers from Friday’s lows despite lower oil prices

The loonie is crawling back against the dollar after Friday’s 1-month high in USDCAD, as moves in Treasury markets meant the dollar is trading softer this morning. The rally in CAD comes despite crude oil prices having fallen slightly after US President Joe Biden faced even more calls to tap the Strategic Petroleum Reserve in an attempt to tackle the elevated gas prices and push back against inflation expectations. read more

US CPI keeps markets volatile following the central bank bonanza

US CPI keeps markets volatile following the central bank bonanza

Next week (15th - 19th November), CPI remains top of mind as a number of nations are set to release reports highlighting above target price growth, however, we believe these releases will have less of an impact on broader markets relative to the US release this week. Additionally, central banks from South Africa and Turkey are expected to deliver fresh rate decisions.  read more

Loonie shaken by strong US CPI print and lower crude prices

Loonie shaken by strong US CPI print and lower crude prices

No one was safe from the broad USD rally in yesterday’s market following the CPI release. USDCAD rallied close to 0.5% as the CPI release reinforced expectations of earlier policy tightening by the Fed, while on the loonie’s side, softer crude oil prices following the rising dollar undermined the petro-linked currency further. read more

US inflation tracks back above 6%, placing pressure on transitory messaging 

US inflation tracks back above 6%, placing pressure on transitory messaging 

With expectations for October’s CPI print to rise from 5.4% to 5.9% YoY already in play, today’s inflation release had to be big to disrupt markets beyond what had already been priced into the Treasury curve and in the FX space during the morning session. read more

Loonie climbs on broad USD weakness, but tight ranges form again

Loonie climbs on broad USD weakness, but tight ranges form again

The loonie was no exception to the USD weakness story yesterday and climbed some 0.15% against the greenback as crude oil prices rose, while Bank of Canada Governor Macklem hit the media to reiterate his view on inflation. Macklem stated the surging inflation is transitory but not short-lived, and reassured the BoC would keep inflation under control. read more

Loonie continues to weather broad US dollar strength as BoC set to remain hawkish

Loonie continues to weather broad US dollar strength as BoC set to remain hawkish

The Canadian dollar continues to trade in a relatively subdued manner despite the broad bounce in the US dollar last week. Expectations of the Bank of Canada remaining one of the hawkish outliers in the G10 central bank space, which is generally pushing back market expectations, is helping support the loonie. read more

ECB and Fed speakers in scope after dovish retaliation

ECB and Fed speakers in scope after dovish retaliation

Next week (8th - 12th November), despite the absence of any major central bank meetings, the focus will remain on monetary policy pricing, especially as the Fed’s media blackout period ends. Notable speeches from Chicago Fed Evans and San Francisco’s Daly will be in scope for US rate traders, while opening remarks from the ECB’s Chief Economist Lane will be top of mind for euro money markets. read more

Strong payrolls keep US front-end yields firm, boosting the dollar 

Strong payrolls keep US front-end yields firm, boosting the dollar 

Amid the dovish pushback from G10 central banks this week and the broad rally in bond markets, front-end US Treasury yields have remained fairly resilient. This theme was extended in early trading today, helping the dollar gain ground ahead of October’s payroll data. While Canada’s net employment change undershot expectations by 10.4k with a print of 31.2k, today's LFS largely met our expectations. read more

Labour force survey likely to confirm the BoC’s hawkish position

Labour force survey likely to confirm the BoC’s hawkish position

With the level of employment in Canada now back to pre-pandemic levels, and the sectoral damage from lockdown limited on an employment basis, net employment gains are likely to slow. Emphasis will therefore be on signs of a tight labour market appearing in underlying metrics such as wage growth and average hours worked. read more

Bank of England bats back market expectations, sends sterling plummeting

Bank of England bats back market expectations, sends sterling plummeting

The Bank of England today shocked markets by voting 7-2 to hold rates at 0.1% while voting 6-3 to maintain the current stock of assets at £875bn. While we largely expected the Bank to hit back against aggressive market pricing of rate hikes by holding rates, we anticipated a tighter split in the vote in order to signal to markets that tighter policy was imminent at December’s meeting.  read more

Markets turn a blind eye to Fed and ECB guidance, loonie off the lows from USD weakness

Markets turn a blind eye to Fed and ECB guidance, loonie off the lows from USD weakness

After touching its lowest point since October 13th, the loonie reversed losses to close the day out on a stronger footing yesterday after the Federal Reserve underdelivered on market expectations and broad US dollar weakness rang through FX markets. Today will be another quiet session for loonie traders today ahead of Friday’s labour market data. read more

Time to taper, but that is all from the Fed for now

Time to taper, but that is all from the Fed for now

The Federal Reserve largely met the market consensus today by announcing plans to taper its QE programme by a maximum of $15bn per month until year-end. Powell opened the door further to give policymakers greater optionality going forward. read more

Loonie trades in tight ranges ahead of the Fed

Loonie trades in tight ranges ahead of the Fed

The Federal Reserve could force USDCAD to breakout to the upside given the right mix of policy tightening and commentary from Chair Powell, however, the possibility of the Fed under delivering on a hawkish message also remains a viable risk. read more

The Canadian dollar continues to grind out gains ahead of Friday’s data

The Canadian dollar continues to grind out gains ahead of Friday’s data

This morning, the Canadian dollar is seeing more notable losses against the US dollar compared to other G10 currencies, but this is likely a retracement from yesterday’s moves. Today’s calendar is sparse for Canada, with building permits being the only data release of note at 12:30 GMT ahead of the crucial FOMC meeting. read more

Monex November 2021 FX Forecasts

Monex November 2021 FX Forecasts

Concerns over Europe’s stagflationary environment in September reverberated through global markets last month, albeit on an inflationary front as opposed to stagnant growth This resulted in money markets continually pushing back against G10 central bank communications to price in aggressive tightening cycles across the space as a whole, while bear flattening occurred in most sovereign yield curves. read more

Loonie struggles to continue rally to 1.22, but labour market data could change this

Loonie struggles to continue rally to 1.22, but labour market data could change this

The loonie remains trading near recent highs, but broad USD buying towards month-end reversed all of last week’s gains. With oil markets looking as if they’ve stalled just north of the $80 mark recently, and equity markets pivoting on whether they post marginal gains, the loonie’s tailwinds have seemingly weakened. read more

The central bank magic trick: turning a dove into a hawk in plain sight

The central bank magic trick: turning a dove into a hawk in plain sight

Price action in G10 FX markets this week has been driven predominantly by pricing in bond markets and the actions of central banks. This dynamic is set to continue next week (1st - 5th November) as the battle against rising inflation migrates from the Bank of Canada and the ECB  to the Reserve Bank of Australia, the Federal Reserve, and the Bank of England. read more

Loonie looks to August GDP data to assess economic performance in Q3 vs the US

Loonie looks to August GDP data to assess economic performance in Q3 vs the US

Today, loonie traders will be keeping a close eye on August’s GDP data at 13:30 BST following the slip in US growth in Q3 and the Bank of Canada’s downgrade to 2021 GDP on Wednesday. The data is expected to show the economy expanded by 0.7% MoM in August, following a tentative start to the third quarter when July’s data printed at -0.1%. read more

ECB meeting: Inflation, inflation, inflation

ECB meeting: Inflation, inflation, inflation

Despite the suppressed expectations, the ECB managed to dull the event down even further by adjusting their opening statement such that it indicates the decision would not include an assessment of the economic outlook. The lack of excitement was visible across markets, as EURUSD remained unfazed after the release of the initial rate statement. read more

Not to be left out, the BoC joins the leading pack of hawks

Not to be left out, the BoC joins the leading pack of hawks

Yesterday, all eyes switched firmly to the Bank of Canada as the central bank not only finalised its QE programme by entering the reinvestment stage but also brought forward its expectation of when the output gap would close from H2 2022 to “the middle quarters of next year”. read more

Bank of Canada ends QE and emboldens hawkish market pricing 

Bank of Canada ends QE and emboldens hawkish market pricing 

The Bank of Canada today announced that it would taper its QE programme by a further C$1bn a week, therefore entering the reinvestment stage, while it also brought forward its forecast for the output gap closing from H2 2022 to “the middle quarters” of next year. read more

UK budget: Sunak saves part of the fiscal windfall with 2024 election in mind

UK budget: Sunak saves part of the fiscal windfall with 2024 election in mind

Today’s long awaited Autumn budget was a damp squib for FX markets given that the majority of the fiscal pledges were announced in advance of the formal unveiling. The net impact of today’s budget is lower bond issuance going forward, with the OBR now projecting £154bn less in borrowing over the following 5-years. read more

Loonie’s tight ranges set to be broken by key BoC meeting

Loonie’s tight ranges set to be broken by key BoC meeting

The loonies’ tight ranges are likely to be broken today as the Bank of Canada updates investors with its latest policy decision and economic outlook. While we expect larger moves in USDCAD relative to other trading sessions this week, the loonies’ slight depreciation trend may not reverse should the Bank not accompany the end to their QE programme with a more hawkish outlook for rate hikes. read more

Loonie volatility is limited ahead of the Bank of Canada meeting

Loonie volatility is limited ahead of the Bank of Canada meeting

The Canadian dollar struggled to hold onto the oil rally yesterday as it slipped at the margin against the US dollar. With very little in the way of economic data today, and the Bank of Canada scheduled tomorrow, today’s session is likely to be the calm before the storm. read more

This week’s BoC meeting could give loonie rally fresh legs

This week’s BoC meeting could give loonie rally fresh legs

The Canadian dollar starts this week on the front foot as oil markets climb to $85.50 per barrel, but the loonie remains far from last week’s highs. A hawkish Bank of Canada meeting may tip the balance in favour of the loonie, although a further taper of the QE programme to the reinvestment level of C$1bn a week is unlikely to be marked as hawkish. read more

Central banks to take centre stage ahead of crucial GDP readings

Central banks to take centre stage ahead of crucial GDP readings

A flurry of central bank meetings take will place across the globe next week (25th - 29th October), while Q3 GDP prints from the US and eurozone will take centre stage on Friday. Several countries will also release inflation readings. Among the central bank meetings are the Bank of Canada, the Bank of Japan and the European Central Bank - in order of importance. read more

Loonie weakens on oil retreating from multi-years high

Loonie weakens on oil retreating from multi-years high

With both Brent crude and WTI taking a leg lower yesterday however, while the market mood was not supporting the loonie either, USDCAD gained around half a percentage point on the day. Some of those gains have been pared back this morning, but looking at the remainder of the day any changes in FX direction should come from broader macro flow given the lack of noteworthy data releases from Canada. read more

USDCAD falls to lowest level since June following upbeat market mood

USDCAD falls to lowest level since June following upbeat market mood

The Canadian dollar continued its climb against the dollar yesterday to reach new highs not seen since July as crude oil prices ticked up higher and risk sentiment remained supportive, while this morning, the loonie climbed up further to June levels. read more

CAD continues to find support in oil rally and weaker USD 

CAD continues to find support in oil rally and weaker USD 

Today’s focus turns to CPI inflation from Canada at 13:30 BST, which will be viewed in light of next week’s policy decision. Expectations for the YoY print are set at 4.3%, slightly higher than August’s 4.1% reading, while the MoM figure is expected to remain unchanged compared to last month, non-seasonally adjusted. read more

Loonie shielded by robust oil prices while USD weakens

Loonie shielded by robust oil prices while USD weakens

The loonie was shielded by strong oil prices in yesterday’s session and managed to withstand pressure from the greenback, while the drop in oil prices during the latter part of yesterday’s session did little to dent the loonie as the US dollar weakened simultaneously and crude oil prices remain significantly high in broader terms. read more

EUR Update: Euro weighed down by near-term factors, medium-term outlook rosier

EUR Update: Euro weighed down by near-term factors, medium-term outlook rosier

While September’s losses were significant at over 2%, we expect the pressure on the euro to ease over the coming months as supply pressures mitigate, which should help to cool inflation and aid growth conditions. We expect the combination of these developments to be supportive for EURUSD. read more

CAD losses limited by strong oil prices despite cautious market mood 

CAD losses limited by strong oil prices despite cautious market mood 

At 15:30 EDT today, the Bank of Canada releases its Q3 Business Outlook ahead of the October 27 policy meeting which comes with fresh projections. Markets will take the survey as an important indicator of what to expect for next week’s meeting. read more

Economic activity and inflation data put stagflation fears to the test 

Economic activity and inflation data put stagflation fears to the test 

Next week (18th - 22nd October), the data calendar revolves around October’s preliminary PMI prints, while China’s Q3 GDP data also scans as one of the more interesting releases. The focus on activity data is likely to be heightened given growth concerns over previous weeks and the impact higher input costs are having. This is especially the case in the eurozone, UK, and China, where rising energy costs are the most pronounced. read more

USD Update: Defiant dollar in Q4

USD Update: Defiant dollar in Q4

Amid the global backdrop of lower growth and higher inflation, the dollar is likely to stay well bid in Q4. However, our latest forecasts now see the DXY index trading a percentage point lower than current spot levels and back towards highs of its previous trading range as the aggressive repricing in FX markets overextended in early October given our views on back-end US rates this year. read more

Big miss in ZEW fails to dent EURUSD as G10 yields moderate

Big miss in ZEW fails to dent EURUSD as G10 yields moderate

Today’s miss in the German ZEW data highlights how German activity is struggling to expand at the start of Q4 as current conditions are no longer improving. The current situation gauge tumbled from 31.9 in September to 21.6 in October, well below expectations of 28.5. EURUSD escaped the lack of optimism spilling into FX markets despite the big miss in today’s ZEW data, as at the same time yields in G10 markets have been moderating today after yesterday’s dramatic climb higher. read more

Macro backdrop of slower growth and rising inflation set to dominate FX markets

Macro backdrop of slower growth and rising inflation set to dominate FX markets

Next week (11th - 15th October), with a limited data calendar, markets are likely to continue focusing on the inflation backdrop and the impact it will have on growth conditions. We take a brief look at the environment in Europe this week and what it means for ECB and BoE pricing. read more

Diverging labour reports play out in North America

Diverging labour reports play out in North America

It was our expectation that today’s Canadian and US labour market reports would show a stark divergence, not only in net employment but also in underlying metrics. This ultimately played out, with the US jobs market adding 194k jobs in September compared with expectations of a 500k increase, while Canada added 157.1k jobs relative to expectations of just a 60k net employment gain. read more

Grappling with the stagflationary backdrop

Grappling with the stagflationary backdrop

Next week (27th September - 1st October), the focus shifts from policy announcements to individual central bankers. The RBA, RBNZ and NBP will have to announce their policy decisions given the latest downturn in the global economic outlook, while on the data front, US and Canadian labour market data stands out. read more

Monex October 2021 FX Forecasts

Monex October 2021 FX Forecasts

In October, global macro conditions are set to maintain a trepid tone in markets over the short-term, especially with key events such as the US debt ceiling penciled in. We expect this to keep the dollar on a firm footing over the 1-month horizon, but deem the current adjustment by FX markets to be too aggressive to be sustainable. read more

From policy announcements to central bank speakers

From policy announcements to central bank speakers

Next week (27th September - 1st October), the focus quickly shifts from policy announcements to individual central bankers as a swathe of speakers fill the economic calendar, largely due to the ECB’s forum on central banking taking place between the 28th and 29th of September. Rather than being in Sintra (Portugal) as has been customary, the event will take place online. read more

Bank of England delivers hawkish surprise, even by the markets standard

Bank of England delivers hawkish surprise, even by the markets standard

The Bank of England today voted unanimously to keep the Bank Rate at 0.1%, while members voted 7-2 in favour of continuing with its existing QE programme. The shift in the QE vote, from 7-1 to 7-2 due to Ramsden joining Saunders in dissenting, set the tone for what was to be a hawkish set of meeting minutes despite their Q3 GDP projection being downgraded by around a percentage point. read more

Fed signals faster tapering in 2023 but under-delivers on next year’s dot plot

Fed signals faster tapering in 2023 but under-delivers on next year’s dot plot

For those looking for an explosive Fed meeting, they may have initially been disappointed by the alterations in the dot plot. However, Powell’s comments meant volatility wasn’t absent in the FX space, with the likes of EURUSD swinging within a 0.55% range and USDJPY climbing over half a per cent higher on the day.  read more

Canada 2021 election: staying the course

Canada 2021 election: staying the course

Leading media outlets, such as CBC News, have called the 2021 election in favour of the incumbent Liberal Party. However, against his best wishes, Justin Trudeau's election gambit didn't pay off, with the Liberals expected to remain the largest party in Parliament but with a minority government. Current projections have the Liberals elected and leading in 158 seats, just 12 seats shy of an outright majority. read more

Central bank bonanza

Central bank bonanza

The 20th - 24th September is packed with central bank meetings, with the FOMC’s decision on Wednesday eyed as the most important economic event by markets. On top of that, the Bank of England is set to release their latest policy decision, while the Norges Bank is expected to be the first G10 central bank to raise rates since the pandemic. read more

Canadian CPI jumps above 4%, but BoC set to look through it

Canadian CPI jumps above 4%, but BoC set to look through it

Headline CPI rose to 4.1% YoY in August, the fastest pace since March 2003, while on a sequential basis, inflation rose only 0.2%, down from a 0.6% MoM increase in July. The loonie took the CPI data largely within its stride as it briefly dipped below the 1.2670 handle. read more

UK inflation jumps to highs not seen since 2012, putting floor underneath GBP

UK inflation jumps to highs not seen since 2012, putting floor underneath GBP

This morning’s CPI data saw headline inflation rise from 2% in July to 3.2% in August, above expectations of an increase to 2.9%, while the core measure also rose substantially from 1.8% to 3.1%. On a monthly basis, which removes favourable base effects, inflation showed rapid sequential growth; CPI rose 0.7% MoM after printing flat in July. read more

Antipodean Update: light at the end of the tunnel, but risks remain elevated

Antipodean Update: light at the end of the tunnel, but risks remain elevated

Our Monex analysts expect NZD to outperform in the short-run due to diverging monetary policy with Australia, however, a more stable macro backdrop in February 2022 should enable the RBA to start ramping up its normalisation cycle and thus AUD should benefit from a delayed tailwind. read more

Inflation to sit top of mind next week

Inflation to sit top of mind next week

Next week’s data calendar focuses heavily on inflation data in major developed market economies, while core CPI readings from Poland and inflation expectations data in Turkey will be viewed amid historically high CPI readings. read more

Another bumper jobs figure for Canada

Another bumper jobs figure for Canada

Canada’s economy added another 90,200 jobs in August after posting a similarly elevated 94,000 net employment gain in July. This now leaves the overall employment just 0.8% below February 2020 levels, the closest it has been since the pandemic began. The data has compounded positive sentiment around the loonie. read more

UK economic recovery stalls in July

UK economic recovery stalls in July

Data this morning showed that the UK economy expanded at just 0.1% MoM in July, undershooting expectations of a 0.5% expansion and slowing from June’s 1% growth rate. The data not only undershot market economists’ expectations, but also those of the Bank of England. The central bank expects the economy to expand 3% in Q3, but with third quarter growth starting on such a weak base, it looks unlikely that their forecast will be met. read more

EURUSD mildly ticks up after statement confirms slowdown in PEPP 

EURUSD mildly ticks up after statement confirms slowdown in PEPP 

The euro enjoyed today’s decision by the European Central Bank to reverse engines and moderately slow down net purchases under the Pandemic Emergency Purchase Programme (PEPP), even though this was widely expected by markets as all signs were pointing to slower purchases. read more

Bank of Canada holds fire but maintains positive outlook

Bank of Canada holds fire but maintains positive outlook

With today’s BoC statement completely following our expectations, our expectations of the normalisation timeline remains intact. We still see the Bank tapering their QE programme by a further C$1bn at October’s meeting, where the idea of delayed growth is likely to be formalised within their latest forecasts, with a final taper pencilled in for December. read more

Central banks set to stretch hawkish wings 

Central banks set to stretch hawkish wings 

Next week, price action in US fixed income markets will continue to garner a lot of market attention, while increasingly hawkish central bank developments will also be in scope. Of note is the Reserve Bank of Australia, who we expect to press on with tapering their QE programme, the Bank of Russia who are expected to hike by 50bps, the National Bank of Poland who will battle with record high inflation, and the European Central Bank. read more

Nonfarms undershoots expectations, confirming previous market pricing

Nonfarms undershoots expectations, confirming previous market pricing

With a total of 235,000 jobs added in August, compared with 1.053m in July, the employment gain undershot expectations by 500,000. While some of the edge was taken off by the July figure being revised up from 943,000 to 1,053m, the lacklustre job growth in August now makes the prospect of the Fed’s median dot signalling a 25bps hike as early as 2022 a distant possibility. read more

Monex Canada September 2021 FX Forecasts

Monex Canada September 2021 FX Forecasts

We continue to envisage mild US dollar weakness across the G10 but expect volatility to remain abundant as liquidity conditions improve. In September alone, markets will have to contend with elections in both Canada and Germany, a rate hike from Norway, and pivotal central bank meetings in the US and Europe. read more

Canada’s economy contracts in Q2 as third wave takes its toll

Canada’s economy contracts in Q2 as third wave takes its toll

Canada’s GDP data for June showed the economy expanded 0.7% MoM as provincial lockdown measures were scaled back, but a downward revision for May (-0.3% revised to -0.5%) resulted in the economy contracting in Q2 by 0.3% QoQ. With the economy weathering the tightening of measures relatively well during the third wave and sitting just 1.5% below pre-pandemic levels, today's data is unlikely to unsettle the Bank of Canada. read more

Powell pushes back expectations at Jackson Hole

Powell pushes back expectations at Jackson Hole

Despite some FOMC members casting hawkish tones to the media over the past 48 hours, Jerome Powell pushed back expectations of policy normalisation in his speech today by not only refraining from announcing the timing of the tapering but also stating that tapering doesn’t signal the timeline for rate hikes. read more

Focus shifts from Jackson Hole to US jobs data

Focus shifts from Jackson Hole to US jobs data

In the week beginning Monday 30th August, the market’s emphasis shifts to monitoring the severity of the latest Covid-19 waves driven by the delta variant, the economic impact they are having via timely data points, and August’s Nonfarm Payrolls data next week. Fixed income and money markets will be taking their cues from the latest payroll data in order to price expectations of September’s Fed meeting. read more

Softer decline in US Durable Goods Orders underpin US dollar

Softer decline in US Durable Goods Orders underpin US dollar

US Durable Goods Orders fell by less than expected in July, with transportation and defense being the main drag on the figure. Transportation equipment, which was down after two consecutive monthly increases, drove the decrease down by $1.7bn to reach $75.3bn. read more

Jackson Hole arrives after a volatile week for macro conditions

Jackson Hole arrives after a volatile week for macro conditions

With a tentative macroeconomic backdrop, next week’s data is likely to have a larger market impact than usual, especially with the quantity of preliminary PMI releases for August. The Fed’s annual Jackson Hole symposium should provide markets with a bit more clarity as to its tapering timeline. read more

UK retail sales fall in July due to transitory factors and Covid concerns

UK retail sales fall in July due to transitory factors and Covid concerns

The release of this morning’s UK July retail sales data for July, which saw sales volumes contract by 2.5% MoM relative to expectations of 0.2% growth, pushed the pound slightly lower against the dollar as it compounds falling consumer confidence metrics and tentative risk sentiment after Covid and growth concerns reappeared. read more

July CPI not enough to move the Bank of Canada

July CPI not enough to move the Bank of Canada

Headline CPI came in hot for July, rising from 3.1% in June to 3.7% YoY, above expectations for a reading of 3.4%. However, despite the headline figure climbing towards the Bank of Canada’s forecasted inflation peak of 3.9%, which they don’t expect to be reached until late Q3, we expect the Bank to maintain its stance that the inflationary overshoot is transitory. read more

Trudeau calls snap election, loonie unfazed at present

Trudeau calls snap election, loonie unfazed at present

The worst kept secret was finally confirmed over the weekend as Prime Minister Justin Trudeau met with Governor General Mary Simon to dissolve Parliament and set a snap election for September 20th. The announcement of a firm election date over the weekend had a limited impact on financial markets this morning. read more

One week closer to Jackson Hole

One week closer to Jackson Hole

Markets are likely to settle somewhat as they await the headlines from the Jackson Hole symposium on August 27th. Next week’s calendar suggests there may be pockets of isolated volatility with policy decisions from both the Reserve Bank of New Zealand and the Norges Bank, while the Reserve Bank of Australia and Federal Reserve both publish meeting minutes. read more

Miss in core print sends USD lower

Miss in core print sends USD lower

The US dollar rose along with Treasury yields ahead of today’s crucial CPI release as the robust Nonfarms figure from July paved the way for expectations that the Fed may have to take its foot off the gas sooner rather than later. Today’s CPI report showed categories sensitive to reopening moderated, posting their weakest contribution to the MoM gain since March. read more

To hike or not to hike, that is the question

To hike or not to hike, that is the question

Markets this week have largely focused on underlying growth conditions, FOMC speakers and Friday’s labour market data, with US bond markets sending conflicting signals to FX traders. Next week (9th – 13th August), the key pieces of data centre around rate decisions from Banxico and the CBRT, both of which have reasons to hike rates due to rising inflation but also have grounds to stay pat.  read more

Dollar on the offensive as bumper jobs number is delivered

Dollar on the offensive as bumper jobs number is delivered

The labour force participation rate came in at the expected rate of 61.7%, which is a good sign the drop in unemployment is representative of economic conditions, rather than a consequence of people leaving the labour force. read more

Canadian employment underperforms, but it isn’t all bad

Canadian employment underperforms, but it isn’t all bad

July’s employment data out of Canada saw the economy add 94,000 jobs. While on the surface, the slip looks seismic, the nature of the job additions and the stage in which the Canadian labour market recovery is at means the underperformance of the net employment data isn’t as concerning as the headline suggests. read more

Bank of England confirms hawkish disposition

Bank of England confirms hawkish disposition

The Bank of England today confirmed to markets that it was leaning on the hawkish side despite interest rates being held at 0.1% and the split on the decision to maintain the current QE programme sitting on the milder side of 7-1. read more

GBP Outlook: Staying bullish on the pound over the medium-term

GBP Outlook: Staying bullish on the pound over the medium-term

Headwinds are likely to persist over the coming month as Covid conditions remain volatile. Over the more medium-term, we expect GBPUSD to rally above the 1.40 handle on the basis of a more structural improvement in the growth outlook. read more

Monex Canada August 2021 FX Forecasts

Monex Canada August 2021 FX Forecasts

With the economic backdrop stabilising somewhat towards the end of July as markets have finally priced in the latest wave of Covid-19 globally, August could arguably be plainer sailing for FX markets, although risks remain. Given the amount of uncertainties that still remain, we expect the dollar to remain broadly firm over the coming month before our expectation of further dollar depreciation plays out over the medium term. read more

Bank of England in focus after inflation overshoots and labour market progress   

Bank of England in focus after inflation overshoots and labour market progress  

Next week, the focus will be on the Bank of England to announce its policy decision and comment on the recent inflation overshoots and recovery in the labour market. read more

Slip in US Q2 growth rate piles pressure on the dollar

Slip in US Q2 growth rate piles pressure on the dollar

With the dollar already under pressure today as the risk environment stabilises and markets embrace the dovish rhetoric from Fed Chair Powell yesterday, the announcement that the GDP release missed expectations by nearly 2 percentage points. read more

Slip in headline CPI trims CAD gains

Slip in headline CPI trims CAD gains

The Canadian dollar has spent much of today’s European session retracing yesterday’s losses as events in China begin to stabilise. However, the release of June’s CPI data has trimmed the loonie’s rally as inflation data begins to moderate and embolden claims that the overshoot is in fact transitory. read more

EUR Outlook: EURUSD in range bound over summer

EUR Outlook: EURUSD in range bound over summer

The recovery in the euro may hit a hurdle in the next six months as headwinds from policy intensify with both the ECB and Fed decisions set to thrust diverging policy stances back into focus for markets. read more

Q2 GDP data and the Fed are in focus amid a global third wave

Q2 GDP data and the Fed are in focus amid a global third wave

Markets will pay close attention to commentary by Chair Powell and the Fed’s assessment of current conditions. A first glance at economic performance in advanced economies in Q2 is also pinned for the week, although growing fears over the coming months might cloud the impact positive GDP figures have on markets. read more

ECB guidance to take centre stage next week, CBR set to hike rates

ECB guidance to take centre stage next week, CBR set to hike rates

The ECB takes centre stage next week, with a revamped strategy review setting the tone for a persistently more dovish course of action in the months to come, while the CBR is set to hike rates further amid a light data calendar. read more

Weathering the storm

Weathering the storm

We have maintained our view of a mild depreciation in the broad dollar over the coming 12-month period, but single out currencies that are likely to buck this broad trend as they are exposed to rising US real yields over this horizon. read more

Central banks in focus next week after Fed’s hawkish shift

Central banks in focus next week after Fed’s hawkish shift

Next week will be critical to assessing the way forward as a fresh batch of inflation data is released and several central banks face the press cameras. On the side, political developments might add excitement to markets. read more

Monetary policy in scope with FOMC minutes and ECB strategy review

Monetary policy in scope with FOMC minutes and ECB strategy review

This week (5th - 9th July), the meeting minutes from the Fed’s June meeting will be scoured by market participants as they try to gain a clearer view on future US interest rates, and the ECB’s Governing Council is set to also meet next week in Frankfurt to discuss the ongoing policy review. read more

Monex Canada July 2021 FX Forecasts

Monex Canada July 2021 FX Forecasts

The dollar defied our expectations in June after the Federal Reserve surprised with a hawkish outlook on the US economy, signalling two rate hikes as early as 2023. We have adjusted our July forecasts to account for the more sensitive Fed reaction function, but broadly we expect the trend of mild dollar depreciation to continue. read more

First Nonfarm Payrolls since Fed may cause significant volatility

First Nonfarm Payrolls since Fed may cause significant volatility

Last week, volatility in FX markets was largely driven by the hawkish shift by the FOMC, as broad dollar moves drove price action in G10 currency pairs. This week, the focus remains largely on the US, with the release of the first Nonfarm Payrolls report since last week’s Fed meeting. read more

Markets to tune into FOMC speakers after the Fed’s hawkish shift

Markets to tune into FOMC speakers after the Fed’s hawkish shift

The focus next week will now be on US data and whether that can live up to the expectations set by the Federal Reserve, while a few FOMC speakers will provide markets with a bit more clarity on their position on the economic outlook.  read more

A week of central bank decisions but the Fed will draw most of the focus

A week of central bank decisions but the Fed will draw most of the focus

The Federal Reserve, Central Bank of the Republic of Turkey, and the Central Bank of Brazil are likely to be the most exciting on this week's agenda. Over the weekend, events in the UK will focussed on the government’s decision to stick to its June 21st reopening plan as cases of the delta variant rise.  read more

It is all about PEPP

It is all about PEPP

Looking ahead, central banks will come back to the fore next week with the European Central Bank, the Bank of Canada, and the Bank of Russia releasing their latest policy decisions. The ECB is likely to steal the show as speculation over the next PEPP decision rises. read more

Monex Canada June 2021 FX Forecasts

Monex Canada June 2021 FX Forecasts

Over the course of May, the dollar downturn exceeded our expectations, while for certain currencies, market participants preemptively priced in the economic reopening as vaccine optimism picked up. Looking ahead, June is likely to prove pivotal for major currency pairs. read more

All eyes on US and Canada labour market data after underwhelming April reports

All eyes on US and Canada labour market data after underwhelming April reports

Next week (31st - 4th June), the focus turns to labour market data from the US and Canada after April’s underwhelming reports. Also on the agenda are policy decisions from the RBA and Reserve Bank of India and China’s official manufacturing PMI. read more

Limited top-tier economic data puts USD dynamics further into focus

Limited top-tier economic data puts USD dynamics further into focus

Next week (24th - 28th May), the economic calendar is light on major market-moving events. US PCE inflation stands out as the most high profile data point on the calendar along with the latest RBNZ rate decision, while the focus will remain on central bank speakers. read more

Reopening reignites sterling’s rally

Reopening reignites sterling’s rally

Following the Bank of England's latest projections, which we are inclined to agree with, we anticipate GBPUSD to rally to 1.46 in the coming twelve months, although the level of uncertainty around our medium-term forecasts remains high. read more

Monex Canada May 2021 FX Forecasts

Monex Canada May 2021 FX Forecasts

The anticipated US dollar downturn materialised over the course of April, with the greenback sustaining losses across the board. Looking ahead, we expect the dollar downturn to continue over the course of Q2, although we argue that most major catalysts over the next month have now been baked into current pricing, meaning a stabilisation in the US dollar could occur in the near-term. read more

European vaccine rollout takes centre stage while developing countries struggle with a dire Covid situation

European vaccine rollout takes centre stage while developing countries struggle with a dire Covid situation

We continue to track the evolution of the vaccine rollout in major economies, as a timely gauge of potential reopening and global economic recovery. In this edition, we highlight the European efforts to catch up with front-runners like the UK and US, while stressing the dire picture in some emerging markets. read more

Loonie to continue gaining but progress to slow

Loonie to continue gaining but progress to slow

Looking ahead, we maintain our view of a cyclical and structural rally in the Canadian dollar. However, we expect the speed of the rally to start to fade as the loonie carves fresh multi-year highs over the course of the coming months. read more

Euro rally hinges on improved vaccine rollout in Q2

Euro rally hinges on improved vaccine rollout in Q2

With the European Commission setting an optimistic target for the number of vaccines administered in Q2, and supply contracts set to confirm this goal, we anticipate EURUSD to rally on a cyclical basis as the region catches up with the likes of the US and UK. read more

Monex Canada April 2021 FX Forecasts

Monex Canada April 2021 FX Forecasts

Dollar strength wasn’t just a theme over the course of the last month, but for Q1 as a whole. Reflationary dynamics in the US, brought about by a strong vaccination roll-out and additional fiscal stimulus packages, caused FX markets to price in US economic outperformance. read more

Flat Japanese yields on the back of YCC sets the ground for a weak yen recovery

Flat Japanese yields on the back of YCC sets the ground for a weak yen recovery

Contrary to our expectations of a smooth rally throughout the year, the Japanese yen broadly weakened against the US dollar over the first quarter of 2021. Most of the yen’s underperformance is attributable to a stronger dollar as markets aggressively priced in a faster economic recovery and sooner-than-signalled monetary policy normalisation from the Federal Reserve. read more

Remaining mildly bearish, but finding pockets of deeper depreciation

Remaining mildly bearish, but finding pockets of deeper depreciation

Together, both Biden's fiscal stimulus package and more aggressive vaccine rollout in the US have increased the likelihood that the US economy will substantially outperform peers in 2021, reflected in both the increase and steepening of the US yield curve. read more

Monex Canada March 2021 FX Forecasts

Monex Canada March 2021 FX Forecasts

FX market price action focused heavily on vaccine developments and reflationary dynamics in February. Given the important role vaccine distribution plays in FX price action, we launched a monthly vaccine distribution chartbook as a means to monitor major vaccine developments around the globe. read more

CAD to continue structural rally but near-term headwinds remain

CAD to continue structural rally but near-term headwinds remain

Since our last CAD outlook, data released from Canada has been mixed. Sentiment gauges, PMIs and other soft data points have remained robust. Meanwhile, more timely hard data such as January’s labor force survey visibly highlight the pressure the Canadian economy remains under during the latest lockdown measures. read more

Monex Canada February 2021 FX Forecasts

Monex Canada February 2021 FX Forecasts

January has proven to be an indecisive month for FX markets. After looking through most of the near-term risks in December and the first week of January, tighter lockdown measures and concerns over vaccine efficacy and distribution thrust the previous risk environment into a bit of a tailspin. read more

A post Brexit Britain leaves sterling at the mercy of Covid-19 developments

A post Brexit Britain leaves sterling at the mercy of Covid-19 developments

The stale nature of Brexit developments over the course of Q4 means it has been some time since our last GDP outlook. In the latter stage of 2020, despite Covid-19 developments, the pound continued to trade based off no-deal Brexit risk as the clock wound down and negotiations stalled. read more

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Simon Harvey

Senior FX Market Analyst


Ima Sammani

FX Market Analyst