European Open: theme shift

Overnight, asian equities were higher on the back of a consensual “bull market” as investors are calling it, and also some worse Japanese data which is generating more expectations for additional stimulus by the BoJ. This has injected some life into Jpy crosses, but not enough to generate any appetizing plays.
One of the best recent movers has been halted. For the first time in 2 months, dairy prices declined, dragging NZD down. The extent to which the milk auction has a lasting impact on NZD will probably be contingent upon the broader swings in the dollar. A sustained pullback in milk prices could threaten the somewhat more optimistic tone from the RBNZ, but policymakers are likely to remain on hold for the time being.
Looking ahead: Cad will be in the spotlight today. Markets love majorities Justin Trudeau’s Parliamentary majority should be supportive of the Cad. A rebound in oil prices also helped the move. However, that won’t dampen the likely dovish tone from Poloz today. Since the last BOC meeting, unemployment increased, core retail sales dropped, consumer prices dropped, GDP slowed, manufacturing activity slowed. And Cad is stronger now then it was in September. Poloz might want to “talk the Cad down” today.
UK public finances data and this evening’s speech by BoE’s Carney will be the other focal point for today. On the latter, press reports suggest that Mr Carney will talk about the impact of the UK’s membership of the EU on monetary policy and financial stability.
After that, we will have Fed member Powell (neutral) on the wires, and the US DOE data for crude. 
No charts for today – nothing inspiring this morning.

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