Although there was no Canadian data release, oil inventories dropped, sending crude prices up over $1 to $61.79. Canada has enjoyed stronger data over the past few days which should have been positive for the Loonie. The same was true in New Zealand. Not only did the Reserve Bank raise interest rates from 7.25 to 7.50 percent, they also signaled that more rate hikes will probably be needed. They felt that inflation risks were considerable thanks to a reacceleration in the housing market and strong overall growth. Bear in mind, New Zealand is one of the few central banks still considering raising rates. Meanwhile Australia also reported stronger data last night even though the Reserve Bank of Australia left interest rates unchanged. Fourth quarter GDP jumped by 1.0 percent on a quarterly basis and 2.8 percent on an annualized basis. The quarterly improvement was double expectations. There is no further Australian data tonight, but New Zealand will be reporting its Q4 terms of trade and Canada will be releasing its housing starts and new housing price reports.
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