Binary Options Trading analysis written by David Frank - BinaryOptionStrategy
Markets
Markets closed out a volatile week quietly. They ended upregistering modest gains as part of what is shaping up to be the equity market’s best month ever.
After trading up and down through most of the session, the major averages closed slightly higher, with the Dow registering a 3.4 percent gain that has helped boost the market about 12 percent for October. It was the fifth consecutive weekly gain for the DJIA.
DJIA CHART
FOREX
The Canadian Dollar remains correlated to broad market sentiment trends. This is with price showing a firm correlation to the S&P 500. This, also, speaks directly to Canada’s own performance which naturally sets the trajectory for its monetary policy and thereby the Canadian Dollar considering the country is highly sensitive to the worldwide business cycle both as a commodity producer and as a key exporter to the globe’s largest economy, the United States.
With this in mind, it is not surprising that the Canadian Dollar surged to the highest in a month last week as investors cheered on the moderation in all three of the major headwinds that had been weighing on economic growth expectations. The threat of an immediate meltdown on the Euro Zone periphery was reduced after an EU leaders’ summit in Brussels concluded with policymakers throwing more money at the problem. Q3 US GDP figures showed growth accelerated to the strongest pace in a year. This ended up warding off double dip recession fears, for now. Finally, official commentary from China began to carry subtle hints that monetary tightening was done and credit may even be loosened in pockets of the economy. This ended up stoking hopes that a hard landing in the world’s second-largest economy will not happen.
While this paints a rosy picture of the Loonie’s prospects, not all is well. Last week, the Bank of Canada took a decisive turn toward the dovish side of the spectrum. They ended up lowering its GDP outlook and conspicuously removing language referencing the unwinding of monetary stimulus in its policy statement. The monthly GDP update to be released on Monday is forecast to show the annual growth rate slowed to 2.2 percent in August, a hair above the 16-month low of 2.1 percent recorded in June, while employment data due Friday is expected to yield a weak 15,000 jobs increase in October. This is reinforcing priced in bets that rates will be at a standstill for the coming year.
This makes for a cloudy outlook for the Canadian currency in the week ahead, with much likely to depend on the deluge of US scheduled event risk in the economic calendar.
USDCAD Chart
COMMODITIES
Oil dropped Friday as investors acknowledged that Europe needs to tighten its belt for years in order to work through a credit crisis. Also, factory production stalled in Japan.
Crude fell 64 cents to end the day at $93.32 per barrel in New York. Brent crude, which is used to price foreign oil, lost $2.17 to finish at $109.91.
Gold closed a bit flat as investors took profits. Gold for December delivery closed down 50 cents to settle at $1,747.20 at the Comex division of the New York Mercantile Exchange.
CRUDE OIL Chart
EQUTIES
Troubles continued to add up for MF Global. Now with a Moody’s downgrade the latest issue to confront the battered brokerage run by former New Jersey Gov. Jon Corzine. Shares tumbled more than 26 percent after falling nearly 16 percent Thursday.
Samsung has overtaken Apple in terms of smartphone sales and expects the fourth quarter to be even stronger. Wynn Resorts lead the winners on the NASDAQ even as analysts scaled back earlier projections for the hotel and casino giant’s earnings potential.
Markets
Markets closed out a volatile week quietly. They ended upregistering modest gains as part of what is shaping up to be the equity market’s best month ever.
After trading up and down through most of the session, the major averages closed slightly higher, with the Dow registering a 3.4 percent gain that has helped boost the market about 12 percent for October. It was the fifth consecutive weekly gain for the DJIA.
DJIA CHART
FOREX
The Canadian Dollar remains correlated to broad market sentiment trends. This is with price showing a firm correlation to the S&P 500. This, also, speaks directly to Canada’s own performance which naturally sets the trajectory for its monetary policy and thereby the Canadian Dollar considering the country is highly sensitive to the worldwide business cycle both as a commodity producer and as a key exporter to the globe’s largest economy, the United States.
With this in mind, it is not surprising that the Canadian Dollar surged to the highest in a month last week as investors cheered on the moderation in all three of the major headwinds that had been weighing on economic growth expectations. The threat of an immediate meltdown on the Euro Zone periphery was reduced after an EU leaders’ summit in Brussels concluded with policymakers throwing more money at the problem. Q3 US GDP figures showed growth accelerated to the strongest pace in a year. This ended up warding off double dip recession fears, for now. Finally, official commentary from China began to carry subtle hints that monetary tightening was done and credit may even be loosened in pockets of the economy. This ended up stoking hopes that a hard landing in the world’s second-largest economy will not happen.
While this paints a rosy picture of the Loonie’s prospects, not all is well. Last week, the Bank of Canada took a decisive turn toward the dovish side of the spectrum. They ended up lowering its GDP outlook and conspicuously removing language referencing the unwinding of monetary stimulus in its policy statement. The monthly GDP update to be released on Monday is forecast to show the annual growth rate slowed to 2.2 percent in August, a hair above the 16-month low of 2.1 percent recorded in June, while employment data due Friday is expected to yield a weak 15,000 jobs increase in October. This is reinforcing priced in bets that rates will be at a standstill for the coming year.
This makes for a cloudy outlook for the Canadian currency in the week ahead, with much likely to depend on the deluge of US scheduled event risk in the economic calendar.
USDCAD Chart
COMMODITIES
Oil dropped Friday as investors acknowledged that Europe needs to tighten its belt for years in order to work through a credit crisis. Also, factory production stalled in Japan.
Crude fell 64 cents to end the day at $93.32 per barrel in New York. Brent crude, which is used to price foreign oil, lost $2.17 to finish at $109.91.
Gold closed a bit flat as investors took profits. Gold for December delivery closed down 50 cents to settle at $1,747.20 at the Comex division of the New York Mercantile Exchange.
CRUDE OIL Chart
EQUTIES
Troubles continued to add up for MF Global. Now with a Moody’s downgrade the latest issue to confront the battered brokerage run by former New Jersey Gov. Jon Corzine. Shares tumbled more than 26 percent after falling nearly 16 percent Thursday.
Samsung has overtaken Apple in terms of smartphone sales and expects the fourth quarter to be even stronger. Wynn Resorts lead the winners on the NASDAQ even as analysts scaled back earlier projections for the hotel and casino giant’s earnings potential.