CAD Quiet Ahead of Tomorrow’s Fed

Tuesday, June 12, 2018

The CAD is continuing to underperform as G10 peers ahead of tomorrow’s Fed meeting. Market participants continue to price in the pending widening of relative central bank policy with the Fed expected to raise rates tomorrow. No news to report on out of Canada this morning is leaving overall sentiment and risk aversion the main driver of movement.

 

The USD mixed to start the morning with the Trump-Kim meeting doing little as far as movement overnight. Fundamentals impressed today with Core CPI beating the 0.1% forecast at 0.2%. While CPI numbers were in line with estimates at 0.2%. Tomorrow’s Fed is likely to bring a rate hike, but movement may be limited with analysts almost fully pricing this in.

 

The EUR is steady and little changed on the week thus far. Thursday’s ECB meeting is extremely important as it will give insight into how much tapering will occur this year before an attempt at normalization next year. Analysts are expecting a positive response overall from the EUR.

 

Equities are mostly up this morning: the Dow up 0.01%, the S&P up 0.10%, NASDAQ up 0.35% and the TSX down 0.08%. Crude Oil is up 0.68% this morning ($66.55) while Gold is down 0.10% ($1,299.20).

 

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