| Wrap Up |
| The Canadian dollar was little changed against the greenback, holding near an earlier three-month high, as Canada’s energy shares overcame worries that new oil pipeline development would become more difficult after the federal election. Canada’s energy industry saw its worst-case election result materialize on Monday as Canadian Prime Minister Justin Trudeau’s Liberal party failed to secure a majority government. Investors are ditching bets that the Bank of Canada will cut interest rates over the coming months as the domestic economy shows resilience and the federal election result adds to prospects of growth-boosting fiscal spending next year. Canadian government bond prices were higher across the yield curve, with 2-year bond up 6.5 Canadian cents to yield 1.622% and the 10-year bond rising 39 Canadian cents to yield 1.522%. |
| Levels and recommendations |
| Global stock markets struggled, as hopes faded that a Brexit deal would be wrapped by next week and a profit warning from Texas Instruments pulled down technology shares. Foreign exchange trading was generally quiet with Brexit uncertainty and central bank meetings due on Thursday in Sweden, Norway and the euro zone. The euro edged 0.1% to $1.1120 before Thursday’s meeting of European Central Bank policymakers, outgoing president Mario Draghi’s final policy meeting. The Japanese yen rose to a one-week high and the Swiss franc gained as investors sought safer assets after British lawmakers forced a delay in the UK government’s Brexit plans. The Canadian dollar is trading flat around 1.3095 levels as broader strength is seen in the US dollar index surrounding the Brexit uncertainty. On the other hand weak domestic wholesale sales data weigh on the CAD which was largely been offset by the gain in crude oil prices. The USDCAD pair is expected to trade in the range of 1.3075-1.3110 levels for the day. |