Analysis and Recommendations:
USD/CAD Fundamental Analysis March 19, 2012, Forecast
The USD/CAD is slightly down, trading at 0.9915 dropping from the open of 0.9920. The USD turned lower after a report on inflation was seen as giving policy makers more reason to maintain ultra-accommodative monetary measures.
U.S. economic data showed continued improvement, but with inflationary pressures starting to rise, [the Fed] may not be able to maintain its ultra-accommodative monetary policy for much longer. Today’s U.S. CPI data could prove to be the main catalyst for trade if it rises above the key 3% level on a year-over-year basis.
U.S. consumer prices increased 0.4% in February, owing mainly to the surging cost of gas, the Labor Department said Friday. The government also reported that inflation-adjusted hourly wages, on average, fell 0.3% in February as higher prices outstripped a 0.1% gain in earnings.
The output of the nation’s factories, mines and utilities was flat in February, the Federal Reserve said Friday. This was well below Wall Street expectations of a 0.4% gain.
Consumer sentiment in March declines for the first time since August, as rising gasoline prices cause a downturn in expectations, according to a key gauge released on Friday.
Released Economic Reports for March 16, 2012 actual v. forecast
|
EUR |
Italian Trade Balance |
-4.35B |
1.62B |
1.15B |
|
EUR |
Trade Balance |
5.9B |
6.2B |
7.4B |
|
USD |
Core CPI (MoM) |
0.1% |
0.2% |
0.2% |
|
USD |
CPI (MoM) |
0.4% |
0.4% |
0.2% |
|
CAD |
Foreign Securities Purchases |
-4.19B |
6.27B |
7.38B |
|
CAD |
Manufacturing Sales (MoM) |
-0.90% |
0.60% |
0.60% |
Economic Events for March 19, 2012
01:01 GBP Rightmove House Price Index (MoM)
The Rightmove House Price Index (HPI) measures the change in the asking price of homes for sale. This is the U.K.’s earliest report on house price inflation, but tends to have a mild impact because asking prices do not always reflect selling prices.
01:01 GBP Nationwide Consumer Confidence
Nationwide Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.
13:30 CAD Wholesale Sales (MoM)
Wholesale Sales measures the change in the total value of sales at the wholesale level. It is a leading indicator of consumer spending.
Government Bond Auctions (this week)
Mar 19 n/a Greece CDS Auction
Mar 19 10:10 Slovakia Bond auction
Mar 19 10:10 Norway T-bill auction
Mar 20 09:30 Spain 12 & 18M T-bill auction
Mar 21 10:10 Sweden Nominal bond auction
Mar 21 10:30 Germany Eur 5.0bn Mar 2014 Schatz
Mar 21 10:30 Portugal Eur 0.75-1.0bn 4 & 6M T-bills
Mar 22 10:10 Sweden I/L bond auction
Mar 22 10.30 UK Auctions 0.625% 2042 I/L Gilt
Mar 22 15:00 US
Announces auctions of 2Y Notes on Mar 27, 5Y Notes on Mar
28 & 7Y Notes on Mar 29
Originally posted here
