The Canadian dollar has softened marginally, down 25 basis points against the USD, though continues to trade near a one-year high on strong commodity prices and tomorrows expected stimulus announcement from the US Federal Reserve.
More on FOMC Stimulus Decision
A recent Bloomberg poll of economists put expectations of QE3 from the Fed at 88%, up from 76% last month. Nearly half expect an open-ended bond-purchasing program of roughly US$65 billion per month.
The Fed has been left with a big dilemma: what amount of stimulus will both not disappoint markets and provide a sustainable boost to GDP? Expect substantial volatility leading into and following tomorrow’s 10:30am (MT) FOMC statement and 12:15pm (MT) press conference.
The German constitutional court has opened the European Stability Mechanism (ESM – bailout fund) for ratification by the government, though has passed it with conditions. Germany can proceed with participation in the ESM as long as its share remains capped at €190 billion, or just under one-third of the €700 billion organization. The Euro rose one-cent against both the USD and CAD on the news.
All eyes will be on Apple today as it is expected to launch the new iPhone 5 today. Many analysts expect Apple to sell 10 million new iPhones by the end of September. Even as consumer spending across the globe has slipped, Apple has dominated the smart-phone and tablet market, owning 70% of the tablet market with the iPad while iPhones have made up 70% of their bottom line earnings.
The TSX has opened up 0.4% while the Dow has gained 0.3% since the opening bell. Crude oil is unchanged at $97.25/bbl while Gold has found a bid and is up 0.35% to $1,740/oz.