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CANADA: USDCAD Tests Resistance Ahead Of 1.37 Handle

CANADA
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  • USDCAD has pushed to session highs of 1.3686, extending a push above yesterday’s latest high, although CAD still outperforms high beta peers owing to broader USD strength.
  • Having yesterday cleared a key resistance at 1.3647 (Sep 19 high), it now tests 1.3683 (50% retrace of Aug 5 – Sep 25 bear leg) after which lies 1.3745 (61.8% retrace of the same move).
  • BoC-dated OIS holds yesterday’s drift to 35bp of cuts priced for the Oct 23 decision. US factors have been in the driving seat, having been circa 38bp on the Fed starting its easing cycle with a 50bp cut before jumping to 32bp after Friday’s strong payrolls report.
  • Can-US 2Y yield differentials meanwhile remain within recent ranges at -70bps.
  • There’s no notable expiry at nearby strikes for today’s NY cut. It’s also another light data docket for both US and CAD legs today, with focus on US CPI/PPI Thu/Fri and CAD jobs plus the BoC BOS/CSCE surveys on Friday.
Source: Bloomberg
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  • USDCAD has pushed to session highs of 1.3686, extending a push above yesterday’s latest high, although CAD still outperforms high beta peers owing to broader USD strength.
  • Having yesterday cleared a key resistance at 1.3647 (Sep 19 high), it now tests 1.3683 (50% retrace of Aug 5 – Sep 25 bear leg) after which lies 1.3745 (61.8% retrace of the same move).
  • BoC-dated OIS holds yesterday’s drift to 35bp of cuts priced for the Oct 23 decision. US factors have been in the driving seat, having been circa 38bp on the Fed starting its easing cycle with a 50bp cut before jumping to 32bp after Friday’s strong payrolls report.
  • Can-US 2Y yield differentials meanwhile remain within recent ranges at -70bps.
  • There’s no notable expiry at nearby strikes for today’s NY cut. It’s also another light data docket for both US and CAD legs today, with focus on US CPI/PPI Thu/Fri and CAD jobs plus the BoC BOS/CSCE surveys on Friday.
Source: Bloomberg