CANADA
- WTI futures surging higher again today has offered CAD little support against the USD, with USDCAD sustaining a move above 1.36 for its first time Sep 19 with a high of 1.3619.
- It has easily cleared Friday’s post-payrolls high of at 1.3591 that had already probed the 50-day EMA at 1.3584. Key resistance is seen at 1.3647 (Sep 19 high).
- Fed policy still has a heavy impact on BoC-pricing, with BoC-dated OIS widening to ~38bp of cuts for the Oct meeting just ahead of the Fed cutting 50bp last month, where it largely stayed until narrowing to 32bp after Friday’s NFP report.
- The next main CAD steers come later this week the jobs report and BoC BOS/CSCE surveys on Fri. It’s followed by CAD CPI on Tuesday (Oct 15) in the last major release before Oct 23.
- Latest CFTC futures positioning showed another small build in CAD net shorts last week, to 32.4% of open interest from 31% the week prior. This share bottomed at 27% in early September having narrowed from a historically large 56% in late July/early August on at the time concerns of diverging BoC-Fed policy.
- Can-US 2Y yield differentials are currently within more typical ranges meanwhile, at -70bps but still comfortably off extremes of around -90bps after the BoC first started its easing cycle in June.
221 words