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CAD heading lower

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8 år sedan

den

31 oktober, 2016

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Foreign Exchange - CAD heading lower Weaker oil prices should see short positions mount against the CAD and the USD/CAD climb higher.

Trade Idea – Foreign Exchange – CAD heading lower

Highlights

The CAD has decoupled from oil prices as economic prospects wane.
Bank of Canada (BoC) has indicated that further stimulus was considered at the latest monetary policy meeting.
Weaker oil prices should see short positions mount against the CAD and the USD/CAD climb higher.

Oil prices offer little support

Since OPEC took the surprise decision to limit production last month crude benchmarks have managed to settle in a new trading range in and around the psychologically important $50/bbl level. Typically, this move would have lent support to the Canadian Dollar (CAD) against its major currency counterparts (due to its status as a commodity currency) but on this occasion it has failed to do so (see Figure 1). Instead, the currency has suffered from a widening nominal yield differential with the US (see Figure 1) and meagre economic prospects. This has helped to keep the USD/CAD moving on a well-established upward path for some time and the trend appears well placed to continue. We see a high likelihood of upcoming oil price weakness and an increasingly dovish bias from the Bank of Canada (BoC) helping to push the pair higher in the next few months.

(click to enlarge)

Crude fragility and dovish inclinations

Earlier this week, comments from the Iraqi oil minister claiming that the embattled nation should be exempt from any OPEC production agreement highlighted the challenges the cartel faces in imposing any limits. Several of its members are facing significant financial and geopolitical pressures (Iraq, Venezuela, Saudi Arabia etc.) and so applying country level quotas is almost certain to face obstacles. Until now the market has perceived the deal optimistically but the difficult practicalities of implementing the agreement are likely to see oil prices retrace a portion of their recent gains. This will likely add to bearish sentiment against the CAD and may prompt a monetary reaction from the BoC.

Recent comments and actions from the BoC have been mixed. At the latest meeting the central bank held interest rates steady (as broadly expected) and described risks to the inflation outlook as “roughly balanced”, a positive shift from “tilted to the downside” in the previous meeting. However in a surprising turn, the BoC governor, Stephen Poloz, did mention that the governing council “actively discussed the possibility of adding more stimulus”. In addition, the BoC reduced both its inflation and growth forecasts for this year and the next. While these actions failed to inspire a market repricing of future interest cuts, it does show a return to a dovish bias which may grow if manufacturing, trade and inflation data continue to disappoint.

(click to enlarge)

Shorts could mount

Net speculative positioning towards the CAD fell into negative territory at the end of last month, but still remains moderate. The move resulted from a reduction in long positions rather than a build-up in shorts, which remain a fraction of January levels due to recent strength in oil prices (see Figure 2). Any weakness in oil could see shorts build up and send the USD/CAD to higher levels. The pair is on a strong upward path and is only likely to face resistance at the 1.356 level, which is near March highs and would represent a 50% retracement of its decline earlier in the year.

Investors wishing to express the investment views outlined above may consider using the following ETF Securities ETPs:

Currency ETPs

EUR Base

ETFS Long CAD Short EUR (ECAD)
ETFS Short CAD Long EUR (CADE)

GBP Base

ETFS Long CAD Short GBP (GBCA)
ETFS Short CAD Long GBP (CAGB)

USD Base

ETFS Long CAD Short USD (LCAD)
ETFS Short CAD Long USD (SCAD)

3x

ETFS 3x Long CAD Short EUR (ECA3)
ETFS 3x Short CAD Long EUR (CAE3)

5x

ETFS 5x Long CAD Short EUR (ECA5)
ETFS 5x Short CAD Long EUR (CAE5)

Currency Baskets

ETFS Bullish USD vs Commodity Currency Basket Securities (SCOM)
ETFS Bearish USD vs Commodity Currency Basket Securities (LCOM)

Important Information

This communication has been provided by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”). The products discussed in this document are issued by ETFS Foreign Exchange Limited (“FXL”). FXL is regulated by the Jersey Financial Services Commission.

This communication is only targeted at professional investors. In Switzerland, this communication is only targeted at Regulated Qualified Investors.

Liknande ämnen:Bank of Canada ETF Securities LCOM SCOM

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ETF från BNP Paribas med tillgång till statsobligationer på tillväxtmarknader säkrade mot den australiska dollarn

Publicerad

10 timmar sedan

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28 januari, 2025

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Sedan i tisdags har en ny börshandlad fond utgiven av BNP Paribas Asset Management kunnat handlas via Xetra. Det är en ETF från BNP Paribas med tillgång till statsobligationer på tillväxtmarknader säkrade mot den australiska dollarn.

BNP Paribas Easy JPM ESG EMBI Global Diversified Composite UCITS ETF erbjuder investerare tillgång till en brett diversifierad portfölj av statsobligationer och kvasi-statliga obligationer från tillväxtmarknader denominerade i US-dollar med fast eller rörlig ränta. ESG-kriterier beaktas vid valet av enskilda värdepapper enligt best-effort-metoden. Detta innebär att emittenter som har förbättrat sin ESG-praxis och prestanda över tid eller har goda chanser att göra det kommer att bli överviktade.

Andelsklassen är valutasäkrad mot den australiensiska dollarn. Investerare kan handla ETF på Xetra i valutan australiensiska dollar.

Namn	Kortnamn	ISIN	Förvaltnings- avgift	Utdelnings- policy	Referens- index
BNP Paribas Easy JPM ESG EMBI Global Diversified Composite UCITS ETF H AUD Capitalisation	BJL5	LU2929405640	0.25 per cent	accumulating	JPM ESG EMBI Global Diversified Composite Index

Produktutbudet i Deutsche Börses XTF-segment omfattar för närvarande totalt 2 344 ETFer. Med detta urval och en genomsnittlig månatlig handelsvolym på cirka 18 miljarder euro är Xetra den ledande handelsplatsen för ETFer i Europa.

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Harbor Health Care UCITS ETF: 2025 hälsovårdsmöjligheter

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11 timmar sedan

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28 januari, 2025

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Westfield Capital Managements managing partner Matthew Renna pratade med Proactive om Harbor Health Care UCITS ETF (WELL) och dess unika inställning till sjukvårdsinvesteringar. Renna lyfte fram fondens aktiva, koncentrerade strategi, som betonade möjligheter över hela hälso- och sjukvårdsspektrumet, från högkvalitativa tillväxtföretag till innovativa bioteknik- och medicinteknikföretag.

Renna delade sin optimism för hälso- och sjukvårdssektorn och noterade att sjukvårdens S&P-vikt är på en lägsta nivå på 10 år, vilket skapar attraktiva upplägg för långsiktig tillväxt. Han sa, ”Hälsovården har en riktigt stor chans att överträffa marknaden. Det är ett bra tillfälle att ta en ny titt på möjligheterna.”

Genom att diskutera viktiga fokusområden redogjorde Renna för fondens investeringar i bioteknikföretag som Ascendis Pharma, som han noterade är nära lönsamhet och positionerat för betydande intäktsökning. På medicintekniksidan betonar fonden innovativa teknologier som de från Dexcom, som leder till kontinuerlig glukosövervakning för diabetes.

Konversationen tog också upp hälso- och sjukvårdens potentiella återväxt när teknik- och AI-sektorerna stabiliseras, vilket är ett övertygande argument för förnyat investerarintresse 2025 och därefter.

Handla W311 ETF

Harbor Health Care UCITS ETF (W311 ETF) är en europeisk börshandlad fond som handlas på bland annat London Stock Exchange och tyska Xetra.

Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, SAVR och Avanza.

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Crypto responds to Trump’s Executive Order and Japan’s rate hike

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12 timmar sedan

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28 januari, 2025

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The Bank of Japan’s decision to double interest rates from 0.25% to 0.5% impacted the crypto market, though less significantly than the reaction in late July 2024. This rate hike, bringing interest levels to a 17-year high, appeared to be largely anticipated by the market, tempering the response of risk assets.

As mentioned in previous updates, corrections in Bitcoin are expected even during bull runs. However, it is encouraging to see signs of market maturity, leverage mitigation and reduced liquidity-driven reactions in such scenarios.

Market Highlights

Trump’s crypto executive order

Trump signed an EO titled ”Strengthening American leadership in digital financial technology”, following SEC’s new crypto task force.

This suggests a shift to a pro-crypto administration and a pivot in digital asset policy. It also showcases new US efforts to foster innovation and clarify its regulatory landscape.

US BTC ETFs more valuable than ever

After a seven-day inflow streak last week, BTC ETFs reached their highest value yet with over $123 billion in total net asset value.

This could be seen as a response to Trump’s executive order, highlighting the importance of the regulatory clarity that comes with it.

Assets resistance despite BoJ’s new rate hike

Assets avoided a meltdown after the Bank of Japan increased interest rates to the highest level since 2008, going from 0.25% to 0.5%.

This contrasts to last August’s meltdown and could indicate a more favorable environment. With less leverage in the system, the impact on liquid markets like crypto is likely to be lower during periods of stress.

Market Metrics

Trump’s executive order and other regulatory developments were overpowered by the BoJ’s rate hike, causing the NCITM (-1.7%) to close the week with a slight decline. However, it’s performance still leads other major asset classes, followed by EWZ (+8.1%) and Gold (+5.3%). This reinforces the notion that crypto has volatility even in the midst of bull runs, an important feature as this asset class matures.