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CAD: All key underlying positives still in place - Westpac

Richard Franulovich, Research Analyst at Westpac, suggests that viewing recent CAD weakness as a purely corrective affair, with all the key underlying positives still in place.

Key Quotes

“Markets continue to heavily favour an Oct 25 BoC follow up hike (80% priced) vs Sep 6 (28% priced), markets concluding that fresh MPR projections at their Oct meeting make that a more suitable date. But why wait? BoC officials have gone out of their way to make their intentions abundantly clear - insurance easings of 2015 have overstayed their welcome – and the data since their 12 July hike their has continued portray resilience.”

“With oil prices largely steady in recent sessions and markets underpricing Sep 6 BoC hike odds CAD weakness looks unwarranted, especially vs the likes of EUR and AUD. Admittedly leading growth indicators are cresting but that is not a trade for today.”

 

China: Expect upbeat economic activity in July – ING

Major economic activity data from China will be out on 14 August and Iris Pang Economist at ING suggests that they expect a positive picture overall.
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USD/JPY bounces off 108.90, US CPI on sight

After a brief test of lows in sub-109.00 levels, USD/JPY seems to have found dip buyers and has now regained the 109.00 neighbourhood ahead of key US
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