The loonie hit a big air pocket this morning after Canada reported a surprise loss of 29K jobs last month all of them full time which decreased by 30K and was offset by a small increase in part-time work. Over the last six months, full-time jobs have been totally flat at 0K. Following an initial reaction, CAD levelled briefly off near $1.0900 but then kicked off a second leg that could potentially retest the $1.1000 big round number.
Until the job announcement, CAD had been holding up well in the face of a strengthening USD. Despite dovish statements from Fed Chair Yellen, strong economic numbers out of the US lately continue to make the case for continued tapering and the potential for subsequent interest rate increases, keeping the US on a tightening/normalization path. This contrasts with the situation in Europe where EUR continues to weaken dragging other continental currencies and even GBP lower after ECB President Trichet left the door open to some sort of easing/stimulus move at next month’s meeting.
In Europe today, indices have already started to give back some of yesterday’s ECB speculation gains. It’s important to remember that the ECB has been running a stealth tapering program for over a year with banks paying back their LTRO loans so even if the ECB brings in some stimulus, it may only partly make up for what it has already taken away.
US indices are also trading lower today as traders continue to take money off the table following yet another failed attempt by the Dow to close above 16,600. With economic and corporate news flow slowing along with tapering compounding the reduced seasonal inflows of money from retirement saving, indices remain vulnerable to a potential correction in the coming weeks within the established trading ranges that have prevailed since the start of 2014.
Symantec $0.47 vs street $0.42
Computer Sciences $1.09 vs street $1.04, raises dividend 15%
CBS $0.78 vs street $0.75
Rumours are circulating that Apple may purchase headphone producer Beats for $3B. This is interesting because historically Apple has preferred to develop its own products rather than go out and buy them.
Economic reports released overnight and this morning include:
Canada employment change (29K) vs street 13K vs previous 43K
Canada full-time jobs (30K) vs previous 12K
Canada part-time jobs 2K vs previous 30
Canada unemployment rate 6.9% as expected
UK trade balance (£1.2B) vs street (£2.0B)
UK industrial production 2.3% vs street 2.4%
UK manufacturing production 3.3% vs street 2.9%
UK construction output 6.4% vs street 7.1%
Germany trade balance €16.4B street €17.4B
Sweden unemployment rate 4.1% vs street 4.2%
Norway consumer prices 1.8% as expected
Norway producer prices (0.6%) vs previous 0.1%
Italy industrial production (0.4%) vs street 1.3%
Greece industrial production (3.1%) vs previous 1.7%
Greece consumer prices (1.3%) vs street (1.2%)
South Korea interest rate 2 50% no change as expected
Australia RBA monetary policy
China consumer prices 1.8% vs street 2.1% and previous 2.4%
China producer prices (2.0%) vs street (1.9%)
Japan leading index 106.5 vs street 106.7