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CANADA: USDCAD Sees Fresh Cycle High, Macklem/Budget Update Eyed

CANADA
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  • USDCAD has set fresh cycle highs of 1.4254 in an impressive increase considering net increases in e-mini S&P 500 on the day.
  • CAD underperforms most on the day although JPY and NOK are bottom of the pack.
  • The move extends Thursday’s clearance of the 1.42 handle. It has also tentatively cleared resistance at 1.4246 (2.00 proj of Oct 17 – Nov 1 – 6 price swing) after which lies 1.4296 (2.236 proj).
  • Whilst not heavy, today’s largest option expiry targets further gains with 1.4300 ($704m).
  • Latest CFTC data showed a further trimmed in CAD net shorts up to Tuesday, although positioning is still heavy: 44.5% of OI vs 49% the prior week and a recent peak 53% in mid-Nov.
  • GS estimate that CAD is pricing about a 5% chance of President-elect Trump’s 25% tariffs threat.
  • Ahead today, BoC’s Macklem gives a speech that should include the questions that the Bank wants to ask ahead of next year’s framework review (text 1520ET) before the government’s Fall Economic Statement (potentially ~1600ET). 
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  • USDCAD has set fresh cycle highs of 1.4254 in an impressive increase considering net increases in e-mini S&P 500 on the day.
  • CAD underperforms most on the day although JPY and NOK are bottom of the pack.
  • The move extends Thursday’s clearance of the 1.42 handle. It has also tentatively cleared resistance at 1.4246 (2.00 proj of Oct 17 – Nov 1 – 6 price swing) after which lies 1.4296 (2.236 proj).
  • Whilst not heavy, today’s largest option expiry targets further gains with 1.4300 ($704m).
  • Latest CFTC data showed a further trimmed in CAD net shorts up to Tuesday, although positioning is still heavy: 44.5% of OI vs 49% the prior week and a recent peak 53% in mid-Nov.
  • GS estimate that CAD is pricing about a 5% chance of President-elect Trump’s 25% tariffs threat.
  • Ahead today, BoC’s Macklem gives a speech that should include the questions that the Bank wants to ask ahead of next year’s framework review (text 1520ET) before the government’s Fall Economic Statement (potentially ~1600ET).