EC Animal Spirits Remain Animated

The US reports the September trade balance and the October JOLTS and service/non-manufacturing PMI/ISM. The data poses minor headline risks. Canada also reports September trade figures, and here, non-oil exports are an important metric. The key report for Canada is the employment report at the end of the week. The most important report of the week for Mexico will be the October CPI on Thursday.  It is expected to be unchanged at 3.0%. The central bank meets next week and is likely to pause before cutting rates again in December.  

The softer neutral stance of the Bank of Canada last week lifted the greenback from around CAD1.3050 to around CAD1.3200. In subsequent trading, the US dollar has given back half of its gains. As the North American session is about to begin, the US dollar is overextended on the intraday charts. Support is seen near CAD1.3100. The risk for a bounce back into the CAD1.3130-CAD1.3140 area. For the fifth session, the dollar is chopping in a now well-worn range against the Mexican peso (~MXN19.05-MXN19.25). We continue to think it is more likely a base than a top.  

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Read more by Marc on his site Marc to Market.

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Bill Myers 1 year ago Member's comment

Great read.