Canada

With the odds of a Fed cut arriving this year now in jeopardy, it is now over to the BOE, ECB or BOC to take the title as ‘first to begin easing’. And that brings Canadian CPI data into focus today for CAD traders.

With traders keen to see who will be the first among the BOE, BOC or RBNZ to cut rates, their attention will be surely on next week's inflation reports for their respective regions.

USD/CAD continues to hold a range inside of a range, but CAD/JPY is bristling at resistance after having set a fresh 16-year high last week.

The bullish move in USD/CAD has been pronounced after the pair bottomed in July, but now the question of topping starts to come in as a major resistance level has come back into the picture.

The Bank of Canada (BOC) are expected to hold rates at today’s meeting, given GDP unexpectedly contracted in Q2. Still, implied volatility has spiked higher for USD/CAD. Perhaps the BOC pause will not be as dovish as expected, Fed members tout a hold or the rise of bond yields (and therefore the US dollar) lose steam. If so, USD/CAD may be better for short bets beneath the April highs.

CAD/JPY has piqued our interest ahead of today's economic data, which includes PMI's for Europe and the US and Canada's inflation and retail reports.

During a hawkish speech, the BOC governor outlined which of the three ‘preferred’ CPI measures they will no long focus on, and why.

During a hawkish speech, the BOC governor outlined which of the three ‘preferred’ CPI measures they will no long focus on, and why.

Last Friday was also a good surprise on the jobs front for Canada as 289,600 jobs were added in May.

The Bank of Canada has kept its benchmark rate unchanged at 0.25% as expected.

Official data showed that Canada's first quarter annualized GDP contracted 8.2% on quarter (vs -10.0% expected).

Canadian Trade Balance will be published later today.

Three big events, three big chances for volatility in USD/CAD tomorrow.