NY Open: Inflation surge boosts CAD
A surprisingly strong Canadian inflation print has placed USDCAD on its back foot in the early New York session. Could this clear a path towards a September rate hike from the Bank of Canada?
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After six weeks of selling, the speculative dollar short against nine IMM currency futures was unchanged in the week to June 5.
The most noticeable change was in the Mexican peso where speculators finally flipped to a net-short following seven weeks of selling.
Additional selling of EUR, GBP, and CAD were offset by buying of CHF, JPY, AUD, and NZD.
In fixed income the strong US jobs report on June 1 and the near-certain US rate hike on June 13 saw leveraged funds enter into curve-flattening mode. They sold all maturities from Fed Funds to five-years while buying all from 10-years to ultras.
The net-short of 148,000 lots in two-years was the biggest in more than five years.
Funds overall turned less bearish on US Treasuries with the net-short value of a one basis point move (DV01) dropping to $180 million, a seven-week low.