Poloz Named BOC Gov, onto Aussie & China Data
The Canadian dollar weakened late on Thursday after a man from the department in change of boosting Canadian exports was named as the new Bank of Canada Governor. On the day, the US dollar was the best performer while the euro lagged on hints about negative deposit rates. Japan is on holiday and the China non-manufacturing PMI is on the calendar. Aussie and China figures are due later this evening, which merits extra attention to Ashraf's Premium trades in AUDUSD. For all these, see the latest Premium Insights
Stephen Poloz will replace Mark Carney on June 2. Poloz currently leads the government-run Export Development Canada. The Canadian dollar initially weakened on speculation he would lower rates to boost exports.This analysis is overly simplistic: Poloz has been an economist for 30 years including a stint at the Bank of Canada. The market is pricing in no chance of BOC cuts for the next 12 months and there is no indication Poloz will lower rates to weaken CAD.
The BOC appointment came at the end of a busy day. The ECB decision caused tremendous volatility in euro crosses and a 4-year low initial jobless claims helped spark a US dollar rally. BOJ Governor Kuroda also stamped a timeline on the Japanese recovery, saying he expects it will be clear from mid-year.
There is some talk about an SNB response following the ECB moves. The tighter interest rate differential could prompt them to act. A move to penalize deposits is more likely than an outright hike in the floor but Switzerland has ignored warnings about currency manipulation before.
The focus starts with Australia when the AiG Performance of Services index will be released at 2330 GMT. This is normally a second-tier indicator but with Tuesday's RBA decision up in the air, every data point is magnified. The prior reading was 49.6.
China data follows at 9 pm ET (2 am London) in with the April non-manufacturing PMI. The prior reading was 55.6.
|ISM Non-Manufacturing PMI (APR)|
|54.0||54.4||May 03 14:00|
|SVME - PMI (APR)|
|50.2||49.0||48.3||May 02 7:30|
|50.4||50.6||51.6||May 02 1:45|
|55.6||May 03 1:00|
|46.7||46.5||46.5||May 02 7:58|
|Final PMI Manufacturing [F]|
|46.7||46.5||46.5||May 02 8:00|
|ECB Interest Rate Decision (MAY 2)|
|0.50%||0.50%||0.75%||May 02 11:45|
|Challenger Job Cuts (APR) (y/y)|
|38.121K||49.255K||May 02 11:30|
|Initial Jobless Claims (APR 26)|
|324K||345K||342K||May 02 12:30|
|AiG Performance of Services Index (APR)|
|49.6||May 02 23:30|
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