Monday, December 3, 2018
The loonie is starting the week on a higher note as international oil prices are rallying and markets are positive on global growth. Trade risks are subsiding as the United States and China have agreed to a 90 day trade truce, as are supply risks, as it is expected OPEC will be announcing production cuts later in the week. There are no top tier domestic economic releases until Wednesday with the Bank of Canada having their last interest rate announcement of the year. It is not expected they will raise the overnight rate from the current 1.75% target.
The USD is firm versus most currencies as G20 meeting political risks are lifting and the Trump-Xi trade truce is driving North American equities higher. US ISM manufacturing PMI data was a beat this morning at 59.3 versus the expected 57.5. Other lower tier US data was mostly at expectation save monthly construction spending which fell unexpectedly -0.1% versus a consensus 0.4% gain.
After disappointing data Friday, the EUR is stable but under pressure. Although overall and individual country manufacturing PMI data was in line with expectation market focus is again on political risks. The ongoing issues with the Italian budget and new issues developing in France will be watched closely. ECB President Mario Draghi will be speaking on Wednesday.
Equities are rallying this morning: the Dow up 1.29%, the S&P up 1.10%, the NASDAQ up 1.21%, and the TSX up 0.22%. Crude oil is up 3.34% (52.63) and Gold is also up 1.05% (1,236.40).
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