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Key macro events keeping markets on edge

Published June 2, 2016
  • Markets are treading water amid a number of key macro events this morning and ahead of U.S jobs data Friday
  • The USD index is marginally lower mainly due to a larger rise in the Japanese Yen following a 2.3% plunge in the Nikkei Index which precipitated a round of Yen buying as traders scurried out of equity positions
  • The Canadian dollar is churning sideways along with oil as traders wait with bated breath for OPEC’s press conference at 10am ET…
  • …a deal amongst members on a new production ceiling (mildly positive for oil prices) looks unlikely
  •  Oil inventory data from the U.S Energy Information Agency is released at 1030am this morning and is expected to show a draw of 2.4M barrels
  • A larger draw than expected, though likely due to temproray outages from the Alberta wild fires, would support prices and the Loonie
  • The European Central Bank met today and left rates unchanged at -0.4% – they discussed measures to introduce a corporate bond buying program to increase liquidity, a potentially negative drag on the euro
  • The U.S reported that private payroll figures grew by 173k during May, slight lower than the 175k forecasted
  • Jobless claims in the U.S fell for the fourth week, coming in a 267k – a potential sign that labour markets continue to tighten south of the border

USDCAD Technical Glance
USDCAD setup remains positive as prices are above the 21 Day Moving Average (blue) and the two year yield spread continues to expand in favour of the USD (white).  Higher government bond yields in the U.S relative to those in Canada are supportive of the USD.