US dollar gets a broad bid
Canadian August GDP was a disappointment and that continued into September with Statistics Canada’s early estimate showing no growth in the month. That puts Q3 growth at just 0.5%, which is a poor rebound during the reopening.
Meanwhile, the bond market continues to go wild with front end yields popping in Australia and everywhere else. US 2s are joining in to some extent today with 2s up 5.1 bps to 0.552%
We’re also at month end so I wouldn’t rule out month-end US dollar buying as a factor in this latest move.
Techncially, USD/CAD has broke above the post-BOC top. The central bank was surprisingly hawkish on Wednesday but the pair hasn’t been able to challenge the post-decision low and has now retraced much of the decline, rising above the 61.8% Fib level.
There’s plenty going on but I think the spot to watch is bonds. There’s a mess unfolding.