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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
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CAD Underperforms Amidst USD Weakness Ahead Of CAD CPI
- USDCAD is holding the day’s rise off overnight lows of 1.369, currently at 1.3725 for back within Friday’s range and near unchanged on the day.
- CAD sees significant underperformance to peers on the day: a combination of a broad-based extension of post-CPI USD weakness and a large widening in negative CAN-US 2Y yield differentials has weighed heavily, offsetting any favourable aspects of the S&P e-mini (+0.8%) and WTI futures (+2%_ rallying strongly.
- CAD’s unwillingness to rally also comes ahead of an important day tomorrow with CAD CPI (preview here) and the government’s Fall Economic Update before BoC’s Macklem speaks on Wed with a speech tilted “The cost of high inflation”.
- We see USDCAD support at 1.3676 (50-day EMA) sitting above last Wednesday’s 1.3655, whilst there is limited resistance until 1.3855 (Nov 10 high).
- RBC recently noted their Positioning Monitor shows “long USD/CAD positioning still quite elevated (when compared to some other USD/G10 pairs)” and “there is an argument to be made that USD/CAD has further space for a selloff amid the current external backdrop”.
- They see it “important to watch whether the key trendline that currently comes in at 1.3623 holds. Beyond this near-term view on USD/CAD, we are not yet ready to abandon our bias for using selloffs as a buying opportunity.”
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.