Quotes from Commerzbank Corporates & Markets:
-We stick to our view that the BoC currently resembles a Fed in Grizzly clothing: its motto is to postpone any rate hike expectations as far as possible. For the time being USD-CAD has settled comfortably in the 1.0620-1.0820/50 range.
-Due to the lack of data from Canada this week (only retail sales on Tuesday) US dollar and risk aversion will be in the driver's seat.
-At present the upper end seems to be the more interesting in USD-CAD following the unsuccessful attempt to breach the downside in USD-CAD, in particular if US data surprises positively and/or the market becomes more risk averse due to geopolitical tensions.
Quotes from Commerzbank Corporates & Markets:
-CAD: Fed in Grizzly's clothing? That is what the Bank of Canada (BoC) seems to be at the moment. Similar to the Fed it is trying to unswervingly pursue a neutral and cautious stance even if the inflation rate (+2.3% yoy in May) has already exceeded its inflation target (2%). While in June its reasoning was based on the downside risks for growth and thus inflation, it is now using the closing of the output gap as the reason.
-According to the BoC, the closing of the output gap relies "on continued stimulative monetary policy and hinges critically on stronger exports and business investments". In its new Monetary Policy Report the BoC slightly lowered its 2014 outlook for global growth and thus also for Canada, while raising the inflation projections. The bank is neutral as regards the "timing and direction of the next change to the policy rate, which will depend on how new information influences the outlook and assessment of risks".
-Only the term "neutral" is new in this wording but does not constitute fundamentally new information unless one reads this to mean that the BoC has become neutral rather than dovish. We would not go as far as that, as the bank has left everything unchanged for months and has therefore been neutral for some time. In the end the BoC met all our expectations by continuing to use all sorts of arguments to justify its cautious stance even though inflation has risen considerably.
-As expected the momentum provided by the rate cut was not sufficient to cause a test of the upper end at 1.0822-50 in USD-CAD and certainly not to breach the level. So the conclusion is: everything has remained unchanged. As a result USD-CAD can return to neutral levels. However, Canadian inflation data for June will be published tomorrow. If it surprises to the upside USD-CAD will move back towards the important support at 1.0620 again.
Quotes from Lloyds Bank:
-Canadian employment data should be the main focus today, but it should take a very strong number to drive USD/CAD below 1.06. The CAD has outperformed yield spreads of late, and after the strong US employment report, the case for CAD outperformance is weak, especially with the oil price dipping back to the middle of the year's range after the sharp move up in June.
Quotes from Societe Generale Cross Asset Research:
-USD/CAD is undergoing an intermediate correction and has given a break below support at 1.0730/1.07. The pair is testing a weekly channel limit at 1.0630/10 a break below which will trigger a deeper down move. For the day, the pair is likely to rebound towards immediate resistance at 1.0684/1.07.
USD/CAD - CANADA MAY BUILDING PERMITS AT 12:30GMT & JUNE IVEY PMI AT 14:00GMT, BOC BUSINESS OUTLOOK & SENIOR LOAN OFFICER SURVEYS DUE AT 14:30GMT 07/07/2014 10:28:00
USD/CAD - 1.0667 (ASIA HIGH) & 1.0700 ARE RESISTANCE LEVELS EITHER SIDE OF 1.0680, BRENT CRUDE OIL PLUMBS 3WEEK LOW CIRCA USD 110.50 A BARREL 07/07/2014 10:27:00
USD/CAD - RESTS IN MIDDLE OF 1.0620-1.0680 PRE-US INDEPENDENCE DAY RANGE, BIDS TIPPED AT 1.0620-30, CANADIAN INTEREST MOOTED (1.0630 = FRI LOW) 07/07/2014 10:27:00
Quotes from Societe Generale Cross Asset Research:
-Within the G10 universe, the spotlight today will be on the CAD with the Bank of Canada set to release the summer issue of its business outlook survey and the senior loans officer survey.
-The sharp fall in AUD/CAD and USD/CAD has been impressive to say the least with the former closing last week below parity for the first time since March. A break of 0.9929, the 200-day ma, opens up a potentially much deeper fall.
-A break of the 200-day ma in 2013 triggered a drop of 5.6%. Canadian building permits for May are forecast to show a 3% mom gain and Friday's employment data is forecast to show net job gains of 26k, which may boost speculation of an earlier BoC rate hike in 2015.
Quotes from UniCredit Research:
-CAD: Both housing data and the Ivey PMI survey in Canada are likely to come in firmer today and may then see USD-CAD testing 1.06, with 1.0585 as the next support level on charts. Yet, given the BoC's prudence on rates, we still anticipate a gradual recovery of this pair to above 1.10.
USD/CAD - USD/CAD SETTLING IN C 1.0670 WITH TRADERS A TAD NERVOUS, USD2.7BN OF EXPIRIES 1.0660-1.0725 ROLL OFF IN AN HOUR OR SO, BATTEN DOWN THE HATCHES03/07/2014 13:20:00
USD/CAD - A WHOPPING +288K, USD/CAD LEPT FROM 1.0656 TO 80 PAID, UNEMPLOYMENT 6.1%, US 10-YR YIELDS +5BP INITIALLY03/07/2014 13:19:00
