Asian equities were generally weaker overnight, pulled lower by commodity weakness but yesterday’s close also looks like a pause in proceedings in the short term. So it looks like UsdCad/Crude may be in for some consolidation/retracement today as opposed to the continuing momentum seen earlier this week. EurCad longs look tactically better still.
Against the declines in Crude & hard commodities, milk futures have extended their recent rise. However, since the rise in milk prices (and strengthening in domestic data flow) argues against the 0.25% cut expected by the RBNZ, NZD long positions might be more advantageous going into today’s meeting. I like continue to like NzdCad longs anywhere around 0.9000 today looking for continued strength above 9050 and 9100 if RBNZ does disappoint.
Looking forward: central bankers are set to take the spotlight. Today’s speeches by ECB’s Lautenschlaeger, Nowotny and Hansson may shed some light on last week’s surprisingly tepid ECB policy loosening. In the UK instead, the record of the Bank of England’s November Financial Policy Committee meeting should provide further clues on the Bank’s thoughts.
Charts for today: