FOREX: Canadian Dollar Outperforming Friday, USDCAD Nears September Lows
Dec-12 13:33
- USDCAD weakness has been one of the most notable developments in G10 FX over the last week, with the better-than-expected jobs data prompting an impressive technical breakdown, plunging below the bull channel drawn from the July 23 low. The ensuing break of 1.3888 bolstered a short-term bearish theme, which has been exacerbated by the softer dollar index and constructive risk backdrop this week.
- As largely expected, the BOC produced a fairly neutral appraisal of the economy and rate outlook alongside the unanimously-expected overnight rate hold at 2.25% on Wednesday. The moderately dovish reaction post-decision has had very little impact on the substantial hawkish repricing in Canada, where markets now assign 25bp of cumulative hikes through the Oct 2026 meeting.
- Furthermore, strength today in the face of a moderate DXY recovery highlights the CAD’s recent resilience. Downside targets for USDCAD include 1.3682, the 76.4% retracement of the Jun 16 - Nov 6 bull cycle and 1.3637, the Jul 25 low.
- *CIBC have noted there seems to be a lot of made-in-Canada ‘alpha’ driving the currency. They attribute this to We are attributing this to the positive data surprises, position cleansing from the macro community and renewed hedging interest as sellers may be concerned they have missed the opportunity. They believe positions could be further pressured below 1.3730.
- *Scotiabank highlight a third net weekly gain for the CAD is its best performance since Apr. Spreads remain supportive of the CAD’s firmer undertone and Scotia think the outlook for relative monetary policy will remain a positive driver for the CAD moving forward.
- *Conversely, we pointed out earlier in the week that JP Morgan is not turning bullish at this stage and instead plan to use the move lower as an opportunity to buy USDCAD topside into next year, which they will continue to use as a funder to EM FX longs.
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MNI: CANADIAN SEP BUILDING PERMITS +4.5% MOM
Nov-12 13:30
- MNI: CANADIAN SEP BUILDING PERMITS +4.5% MOM
- CANADA RESIDENTIAL BUILDING PERMITS +4.8% MOM; NON-RESIDENTIAL +4.0% MOM
US: MNI POLITICAL RISK - House Tees Up Votes To End Govt Shutdown
Nov-12 13:25
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- At 19:30 ET 00:30 GMT, President Donald Trump will host a White House dinner for finance leaders, including the chief executives of Nasdaq and JPMorgan Chase. White House Press Secretary Karoline Leavitt will brief at 13:00 ET 18:00 GMT.
- Secretary of State Marco Rubio will participate in G7 sessions in Canada on Ukraine and maritime security. A meeting with Canadian Foreign Minister Anita Anand will offer an opportunity to reset trade talks.
- The longest government shutdown in US history appears set to end tonight. The House of Representatives will gavel in at 16:00 ET 19:00 GMT to begin voting on the Senate's CR/minibus package. A final vote is expected at around 19:00 ET 00:00 GMT.
- The White House appears to be taking steps to dial down tensions with key trading partners. Trump’s tariffs may be weakening a key security alliance in the Indo-Pacific.
- The White House took another step towards shuttering the Consumer Financial Protection Bureau.
- Washington and Riyadh are finalising agreements ahead of Crown Prince Mohammad bin Salman's visit next week.
- Russia's Foreign Ministry said Moscow is ready to resume talks with Ukraine.
- The most advanced US carrier fleet arrived in Southern Command yesterday. Trump's end goal in Venezuela remains unclear, but experts say the buildup of military assets in the southern Caribbean is inconsistent with small-scale strikes on alleged drug boats.
- Poll of the Day: Nearly half of Democrats disapprove of the government shutdown deal.
Full Article: US DAILY BRIEF
SOFR OPTIONS: Morning Option trades
Nov-12 13:15
- SFRX5 96.18/96.31^^, traded half in 5k.
- SFRX5 96.25/96.12ps, traded 1.75 in 2k.
- SFRZ5 96.18/96.31/96.50/96.62c condor, traded 6 in 5k.
- SFRZ5 96.12/96.25/96.50/96.62c condor, traded 6.75 in 6k.
- SFRH6 96.37/96.25ps 1x2, traded half in 5k.
- 0QX5 97.12/97.06/96.87/96.75p condor, traded 5 in 5k.
