- Bank of Canada Business Outlook Survey ahead.
- Oil prices slump after weak Chinese GDP data.
- US dollar trading negatively-JPY outperforms.
USDCAD: 1.3645, overnight range 1.3636-1.3664, close 1.3639, WTI $81.06, Gold, $2411.14
The Canadian dollar remains rangebound ahead of key reports and data this week. The Bank of Canada’s (BoC) quarterly Business Outlook Survey (BOS) and Canadian Survey of Consumer Expectation reports are released today. Both will be closely scrutinized for insight into the inflation outlooks. BOC policymakers are most concerned with the estimates for inflation 1-year ahead.
Global FX markets were a tad erratic following the failed assassination of Donald Trump. The US dollar rallied initially in Asia but the gains were short-lived, and the greenback was trading lower by the time NY opened. Trump raised his fist in defiance as security officials were trying to hustle him off-stage and that picture captured the imagination of Americans. They saw a bloodied but unbowed candidate which contrasted sharply with Joe Biden’s feeble, befuddled image which saw the odds of Trump winning the 2024 election jump to 73.3% on William Hill (UK betting site).
Weaker than expected Chinese economic growth and soft Industrial Production data weighed on oil prices. West Texas Intermediate fell from Friday’s peak of 83.71/barrel to 80.46 as it increased fears of softer global demand even as Opec and friends begin to increase production starting in October.
Asian equity market action was subdued due to a Japanese holiday. Australia’s ASX 200 closed with a 0.73% gain. European bourses are down, led by a 0.66% decline in the French CAC 40 index. S&P 500 futures are up 0.38% and the 10-year US Treasury yield is 4.238%.
EURUSD is in the middle of its 1.0883-1.0920 band with action expected to be contained in the 1.0890-1.0920 range due to sizeable option maturities, at least until 10:00 am EDT today. Afterward, the focus shifts to Thursday’s ECB monetary policy meeting.
GBPUSD traded in a 1.2962-1.2991 range and is near the bottom of that band in NY trading. The July House Price index fell 0.4% m/m compared to 0% in June while the annual rate dipped to 0.4% from 0.6%. The results were ignored.
USDJPY traded defensively in a 157.75-158.43 band with trading subdued because Japanese markets were closed for Marine Day. Prices were supported by the increase in the US Treasury yields but traders remain wary about fresh BoJ intervention.
AUDUSD traded in a 0.6763-0.6789 band with gains offset by soft Chinese data.
Today’s Canadian data includes Manufacturing and Wholesale Sales.
