Loonie Steals the Spotlight as May’s Deal Looms

The CAD stole the spotlight overnight with a strong beat in Core Retail Sales of 1.5% over 0.6% expected. This provided some relief for the loonie from recent oil price weakness, however failed to break through trendline support levels. Traders will be looking to tonight’s CPI figures where another strong beat could see breakout traders wishes come true.

The Dollar had a relatively quiet days trade with Jobless Claims coming in at 241k, bang in line with market expectations. The Republican’s released their heath bill to the Senate to more grumbles from members. It proposed deeper cuts to medicaid funding than the house bill and repeal taxes. This remains a key test for Trumps government as this will be the second attempt and a strong indication as to whether his all-important ‘massive’ tax cuts will come to fruition.

The Sterling held steady despite a strong manufacturing orders beat and more Hawkish comments from BOE members who seem to be focused on data alone, discounting the real world issues associated with May’s botched election and Brexit uncertainty. On that note, May appears to be on the cusp of a deal with the DUP, so traders will have a keen eye on the newswires for any positive news to bring some life back into the Cable. The Northern Irish will not let May off the hook easily so expect s few projects on the DUP’s wishlist to be given a swift go head.

To round off the week we have a raft of European PMI data out which will give traders a bit more colour on the strength of the Eurozone after a Consumer Confidence beat last night.

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