The US dollar is broadly firmer though the antipodean currencies continue to enjoy residual strength. The Canadian dollar is not moving higher with them because of Bank of Canada meeting today.
Economic growth in Canada and Switzerland beat expectations, but currency issues are causing analysts to urge caution for the future.
In the fourth quarter of 2014, Canada saw GDP rise by 2.4% annualized, according to a statement by Statistics Canada issued on Tuesday. The growth was above expectations although slightly lower than third quarter growth, which rose by 3.2%, according to a revised estimate. Economists had expected 2% economic growth.
Politics makes for strange bedfellows.
The German critics on the right of Chancellor Merkel think that Greece should leave the monetary union. The economic advisers to Merkel have argued that the Greece’s exit would not necessarily be disruptive.
The Reserve Bank of Australia defied expectations and left rates on hold earlier today. This has lifted the Australian dollar back to yesterday’s highs near $0.7845 were it stalled. The derivatives market had discounted nearly a 2/3 chance of a cut today. The RBA’s statement indicates the door is open to further easing, and most analysts will simply push out the expectation to April and May. We look for one cut in Q2 though some investment banks forecast two cuts.
The Transatlantic Trade and Investment Partnership (TTIP) is being vaunted as the world’s largest free trade agreement that promises to liberalise one-third of global trade.
But TTIP is not without its detractors; critics of many stripes have raised concerns about the erosion of democracy and regulatory sovereignty risked by the proposed deal.
The Transatlantic Trade and Investment Partnership, or TTIP, will be the world’s biggest free trade agreement. It is geared toward increasing trade between the EU and the US by opening various markets currently restricted in access or closed by tariffs or regulatory barriers. These include everything from pharmaceuticals, chemicals and energy to food, drink and clothing.
An indicator of business activity in fell to its lowest point since July 2009, with double-digit declines in production, new orders, and inventory backlogs.
The Institute for Supply Management’s Chicago Business Barometer fell 13.6 points in February, indicating a contraction of business activity in the region for the first time since 2013.
The US dollar is firmer to start the week against most of the major currencies. The Eurozone reported less deflation than expected, and Germany and Italy reported better manufacturing PMIs. This helped the euro recover from the initial slide in Asia that had taken it down to $1.1160. Disappointing capex figures from Japan coupled with US 10-year yields firming back above 2.0%, helped lift the dollar toward JPY120, but offers there capped a stronger advance.
March is said to come in like a lion and leave like a lamb. It does indeed appear to be coming in like a lion for investors. There are four major central bank meetings and the US employment report. Although Yellen did not convince many that the Fed is set to hike rates in June, yields in the Eurozone continue to fall in anticipation of the bond-buying scheme that will start later this month. The resulting widening of the interest rate differentials lent the dollar support.
Economic relations between India and the United States seem to be going well. Prime Minister Modi and President Obama reinforced this in New Delhi endorsing the India–US Delhi Declaration of Friendship. But beneath the friendly joint statement of a new economic partnership lie considerable differences on critical issues of economic significance. Strengthening bilateral relations means overcoming these hurdles.
