Canadian Dollar: Central Bank Optimism Gives Currency A Fresh Boost

Currency markets were excited for less than an hour over the latest Monetary Policy Report (MPR) from the Bank of Canada. Before the dust settled, USD/CAD, the Canadian dollar versus the U.S. dollar, reached a near 3-year low. Economic optimism from Canada’s central bank gave the Canadian dollar a fresh boost. Bank of Canada Governor … Read more

Yet Another Timely Lesson from Economic Exuberance

“One-Twenty Two” is a different narrative for students and fans of financial markets. This blog often examines the investing and trading implications of extremes in financial markets. By definition, an extreme condition marks a top or a bottom in prices and invites contrary thinking. For example, the cyclical concepts of “overbought” and “oversold” measure temporary … Read more

Latest Housing Starts, Construction Employment Undermine Strong Q1 GDP

U.S. Gross Domestic Product (GDP) for the first quarter of 2020 (advanced estimate) plunged by 4.8% as the coronavirus pandemic put the economy on lockdown. The following categories made positive contributions to GDP in ascending order of their contribution to the percentage change: Housing and utilities: .08% Change in farm inventories: 0.10% Government consumption expenditures … Read more

Housing Market Review (July, 2018) – A Wobbly Edifice As Builders Break Down And Data Weaken

I saw a flicker of hope for home builders in the May Housing Market Review. Traders decided to snuff that flicker out very quickly afterward. When I wrote June’s housing market review and described a “struggling flicker,” the iShares US Home Construction ETF (ITB) was once again bouncing off the bottom of 2018’s trading range. … Read more

Materials Build On A Bearish Breakdown

This picture is exactly what I do not want to see as the stock market struggles to hold critical technical supports: a major index of economically-sensitive stocks confirming a breakdown of support at its 200-day moving average (DMA). The Materials Select Sector SPDR ETF (XLB) lost 1.3% on a day when the S&P 500 (SPY) … Read more

Canadian Dollar: Economic Data Overriding the Brakes of the Bank of Canada

The Canadian dollar (FXC) is at an interesting juncture. Strong economic data has strengthened the currency but the Bank of Canada (BoC) has applied brakes on currency’s rally. The Canadian dollar weakened in the wake of policy statements in October and December. The last word of 2017 went to the economic data as hot inflation … Read more

GDP Helps Confirm Australian Dollar Breakdown After Brief Post-RBA Optimism

The currency market painted a bullish interpretation of the latest monetary policy decision from the Reserve Bank of Australia (RBA). By the time of the September quarter GDP report, that incremental bullishness disappeared and setup a bearish interpretation of the Australian economy. Source: The net result, which includes a U.S. jobs report, is an … Read more

U.S. Concrete: A Missed Opportunity

When I described U.S. Concrete (USCR) as a strong play on the U.S. economy, I noted I would wait for a dip in the stock before picking a spot to buy. That opportunity came a lot faster than I expected as USCR dipped down on rising volume to the top of its previous trading range. … Read more

A Recharge for the Canadian Dollar Bull

A little over a week ago, I explained why I put the Mexican peso and the Canadian dollar (FXC) on shorter leashes. Canada’s extremely strong second quarter GDP report at the end of August just loosened that leash a little. Statistics Canada reported 2Q real GDP growth of 1.1%. The annualized growth rate of 4.5% … Read more

Forex Critical: Speculators Hold Positions Even As Backdrops Shift

In my last posts on the euro (FXE), the Canadian dollar (FXC), and the British pound (FXB), I noted significant trading moves by speculators in foreign exchange as reported by the CFTC’s Commitments of Traders (CoT). The latest CFTC CoT report shows more of the same for these currencies but the backdrops may be shifting … Read more