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USD/CAD Up on Oil, Market Awaits Yellen

Published December 19, 2016
  • Stocks and bond yields all drifted lower on Monday as investors cashed in on some of their recent bets that the anticipated fiscal boost from the incoming Trump administration will support riskier assets at the expense of bonds
  • Wall Street hit record highs and the dollar rose to a 14-year peak last week, after the US Federal Reserve hinted that rates could rise as many as three times next year, tempting investors to cash in and book some pre-holiday profit as the last full trading week of the year got underway
  • The dollar steadied close to its highest levels in 14 years on Monday, underpinned by expectations that a fiscal expansion planned by US President-elect Donald Trump will boost inflation and lead to a faster pace of interest rates hikes
  • The market now awaits further comments from Federal Reserve Chair Janet Yellen as investors hope she will provide more insight on the Fed’s strategy for 2017 in her speech today at 1:30 PM EST
  • Bets on rising oil prices surged initially as investors gave the supply-cut deal between OPEC members and non-OPEC countries the thumbs up
  • Nevertheless, the market swung back later this morning, as sentiment changed to skepticism on whether major oil producers will stick to their agreement next year
  • Germany’s business sentiment and confidence improved to the highest level since February 2014 indicating that German corporates were not too concerned by Donald Trump’s recent election win. As a stalwart of the Eurozone, Germany now puts the EU on stronger footing heading into 2017