CAD in focus on Canada snap election

“If most traders would learn to sit on their hands 50 percent of the time, they would make a lot more money.” – Bill Lipschutz

 

 

HEADLINES

 

 

• Canada's Trudeau takes gamble, calls 'pivotal' snap election for Sept. 20
• China's Port Shutdown Signals Higher-for-Longer Inflation, which is Supportive USD
• EUR/USD rises further to the 1.1800 area, fresh one-week highs
• Gold prices rise to finish higher for the week after fall in consumer sentiment reading
• S&P 500 grinds to another record to close out winning week
• Wall Street Is the Most Bullish on Stocks in Almost Two Decades
• Oil prices will likely stay high – Rabobank

 

 

FOREX

 

 

Canada's Trudeau takes gamble, calls 'pivotal' snap election for Sept. 20

 

Canadian Prime Minister Justin Trudeau on Sunday called an early election for Sept. 20, saying he needed a new mandate to ensure voters approved of his Liberal government's plan to recover from the COVID-19 pandemic. Trudeau, 49, is betting that high vaccination rates against the virus and a post-pandemic economic rebound will help him prolong and strengthen his grip on power. Newly-released data shows 71% of the country's eligible population is fully vaccinated.

 

China's Port Shutdown Signals Higher-for-Longer Inflation, which is Supportive USD

 

News out of China is that its largest two container ports of Shanghai and Ningbo Zhoushan are facing severe bottlenecks, which should serve as a warning to investors that the pandemic has not yet completed its disruption of the global supply chain.

If supply-driven inflation persists for longer than expected those assets that have appreciated over recent months as part of an 'hot inflation trade' will potentially find ongoing support; the Dollar is the G10 FX's space's prime candidate.

 

EUR/USD rises further to the 1.1800 area, fresh one-week highs

 

The EUR/USD rose further and printed a fresh weekly high at 1.1800. The pair is hovering around the highs, with the bullish tone in place, as the US dollar remains under pressure across the board. The greenback was falling on Friday, and after the University of Michigan Consumer Sentiment report, it accelerated to the downside. The index tumbled unexpectedly to 70.2, the lowest level since 2011.

 

 

COMMODITIES

 

 

Gold prices rise to finish higher for the week after fall in consumer sentiment reading

 

Gold futures traded higher on Friday, with a decline in a U.S. consumer sentiment index contributing to the metal’s rise, prompting prices to finish higher for the week. Data released Friday showed that the University of Michigan consumer sentiment index fell to 70.2 in August, the lowest level since the height of the pandemic in April 2020, from 81.2 in July.

 

 

STOCKS

 

 

S&P 500 grinds to another record to close out winning week

 

The S&P 500 and Dow Jones Industrial Average hit fresh all-time highs on Friday as both indexes capped off modest gains for the week. Shares of Disney jumped 1% after it reported blowout fiscal third-quarter earnings, helping pushing the Dow to a new record. The media giant crushed Wall Street expectations on Disney+ subscriber growth and overall revenue and earnings.

 

Wall Street Is the Most Bullish on Stocks in Almost Two Decades

 

About 56% of all recommendations on S&P 500 firms are listed as buys, the most since 2002. It’s one more data point that shows the extent of the euphoria sweeping markets after a blockbuster earnings season. U.S. companies aren’t the only ones feeling the love. In Europe, about 52% of recommendations on Stoxx 600 firms are buy or equivalent, a 10-year high. In Asia, that number jumps to 75%, the highest proportion since at least 2010.

 

 

ANALYSIS

 

 

Oil prices will likely stay high – Rabobank

 

“Looking forward, the oil market is heading into next week with a mixed technical picture. On the bullish side of things, the spot Brent contract recaptured the psychologically important $70/bbl level on the upside this week, but on the other hand, the market remains below its 20-day moving average.”

“We do not expect OPEC+ to change course on its already agreed to production increases and, as such, we expect oil prices will likely stay high and US balances will remain tight. Furthermore, this dynamic could work to reignite inflation-driven commodity index flows from large asset managers that have been so important to the oil market this year.”

 

 

CHART

 

 

Pound / dollar – 4 hour Candlesticks

Source: GKFX Prime Metatrader 4

GBP/USD has formed a flag pattern on the 4-hour chart following the sharp rally off long term support at 1.36. A break above the channel would be bullish. - Prepared by Trading Writers*

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

SOURCE

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/oil-prices-will-likely-stay-high-rabobank-202108131640
https://www.fxstreet.com/news/eur-usd-rises-further-to-the-11800-area-fresh-one-week-highs-202108131614
https://www.poundsterlinglive.com/usd/15811-pound-dollar-china-s-port-shutdown-signals-higher-for-longer-inflation-which-is-supportive-usd
https://www.cnbc.com/2021/08/12/stock-futures-open-close-news.html
https://www.marketwatch.com/story/gold-futures-rise-aim-for-highest-settlement-in-a-week-11628855199
https://finance.yahoo.com/news/wall-street-most-bullish-stocks-121500623.html