Talking Points:
- Canadian Dollar Falls as Liberals Unseat PM Harper to Score Election Win
- British Pound Looks to BOE Commentary for Rate Policy, Brexit Impact Clues
- See Economic Releases Directly on Your Charts with the DailyFX News App
The Canadian Dollar faced selling pressure as early results showed Justin Trudeau and the Liberal Party emerging triumphant in Canada’s general election, unseating incumbent Prime Minister Stephen Harper. The selloff likely reflected uncertainty ahead of a change of leadership. Weakness may not prove lasting however considering Mr Trudeau campaigned on a proposal to step up fiscal stimulus, which may take the pressure off the BOC to cut interest rates further.
The New Zealand Dollar outperformed in overnight trade as front-end yields jumped higher, hinting at ebbing RBNZ rate cut speculation. Priced-in expectations continue to envision at least one 25 basis point reduction in the 12 months ahead however. The Australian Dollar likewise advanced after minutes from this month’s RBA policy meeting showed the central bank expects growth to have picked up in the third quarter, which probably reduced the perceived likelihood of near-term stimulus expansion.
Looking ahead, a quiet data docket is likely to see investors focus on scheduled commentary from BOE Governor Mark Carney and Deputy Governor Andrew Bailey. Both are due to speak at a hearing before Parliament’s Treasury committee. The markets will be keen to parse the two policymakers’ remarks for clues about the probability of a near-term interest rate hike as well as a preview of a study on the impact of a would-be UK exit from the EU on BOE policy.
Mr Carney will use the Cairncross memorial lecture at St Peter’s College on Wednesday to present the so-called “Brexit” report’s findings in earnest. As for policy normalization, 90-day Sterling futures are pricing in the first move higher in the benchmark lending rate at some point in third quarter of next year.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 22:30 | AUD | ANZ Roy Morgan Weekly Consumer Conf | 113.3 | - | 115.6 |
| 00:30 | AUD | RBA October Meeting Minutes | - | - | - |
| 05:30 | JPY | Nationwide Dept Sales (YoY) (SEP) | 1.8% | - | 2.7% |
| 05:30 | JPY | Tokyo Dept Store Sales (YoY) (SEP) | 4.9% | - | 6.1% |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 06:00 | CHF | Trade Balance (CHF) (SEP) | 3.27B | 2.86B | Medium |
| 06:00 | CHF | Exports (MoM) (SEP) | - | -2.4% | Low |
| 06:00 | CHF | Imports (MoM) (SEP) | - | -4.0% | Low |
| 06:00 | EUR | German PPI (MoM) (SEP) | -0.2% | -0.5% | Medium |
| 06:00 | EUR | German PPI (YoY) (SEP) | -1.8% | -1.7% | Medium |
| 06:00 | JPY | Machine Tool Orders (YoY) (SEP F) | - | -19.1% | Low |
| 07:00 | JPY | Convenience Store Sales (YoY) (SEP) | - | 1.7% | Low |
| 08:00 | EUR | ECB Current Account SA (€) (AUG) | - | 22.6B | Low |
| 08:00 | EUR | ECB Current Account NSA (€) (AUG) | - | 33.8B | Low |
| 9:00 | GBP | BOE’s Bailey Speaks at Treasury Committee | - | - | Medium |
| 10:00 | GBP | BOE’s Carney Speaks at Treasury Committee | - | - | Medium |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EURUSD | 1.1017 | 1.1101 | 1.1154 | 1.1185 | 1.1238 | 1.1269 | 1.1353 |
| GBPUSD | 1.5264 | 1.5319 | 1.5344 | 1.5374 | 1.5399 | 1.5429 | 1.5484 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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