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CAD rallies as stocks prepare for a flood of news

CMC Markets

Stock markets around the world for the most part have been following the Dow higher rather than the NASDAQ lower. China rallied on the back of an improving leading indicator while Australia had an overdue correction and Japan was closed. European indices are trading broadly higher and US indices are also heading toward a positive start to the day. Outside of China, overnight economic numbers were pretty much a non-event. UK GDP accelerated but not as much as expected which could keep a lid on GBP for now. Meanwhile reports out of Europe suggest that ECB President Draghi told German officials the despite low inflation the central bank is unlikely to bring in new QE any time soon, which would support recent gains in EUR. Today’s FX league table finds CHF falling to the bottom as traders rotate out of defensives and CAD soaring to the top of the chart. There wasn’t any major news out of Canada to drive this but CAD has been lagging peers like AUD and NZD in recent months and may be starting to play catch up on recognition an improving US economy is good for Canada too. Commodities remain generally well supported as traders anticipate that improving economies in the US and China may help to increase resource demand over time. Earnings reports were mixed and it appears that stocks remain stuck in their current trading ranges. Today may see traders positioning for the rest of the week which has the potential to be a lot more active as tomorrow brings the main monthly basket of data for Japan, GDP for the US and Canada, US ADP payrolls, German employment and oh yes, an FOMC meeting. Thursday and Friday look to be just as busy. Corporate News Suncor Energy $1.22 vs street $0.96 fantastic! Valero Energy $1.54 vs street $1.39 sales $34.4B vs street $30.8B A+! Coach $0.68 vs street $0.61 sales $1.10B vs street $1.13B, North America same store sales (21%) vs street (14%) ouch!!! Archer Daniels $0.55 vs street $0.74 sales $20.6B vs street $22.0B ouch again! Forest Labs $0.87 vs street $0.43 wow! Merck $0.88 vs street $0.79 great! Bristol Myers $0.46 vs street $0.43 Cummins $1.83 vs street $1.67. excellent! Goodyear Tire $0.56 vs street $0.60 Economic News Economic reports released overnight and this morning include: UK GDP 3.1% vs street 3.2% vs previous 2.7% Spain unemployment 25.9%, previous revised down to 25.7% from 26.0% Germany consumer prices 1.3% vs street 1.4% Italy retail sales (1.0%) vs street (0.7%) Hungary interest rate 0.10% cut to 2.50% as expected China leading index 99.9 vs previous 99.0 Economic reports due later today include: 10:00 am EDT US consumer confidence street 83.2

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