Archived IMT (2010.04.20)

LOONIE SOARS after the Bank of Canadas interest rate decision to hold rates unchanged was accompanied by BIGGER THAN EXPECTED UPGRADE of 2010 GDP growth to 3.7% from the previous 2.9% and seeing CPI higher than its 2% target in 2010. Another HAWKISH remark was to remove the conditional commitment to keep rates on hold until end of June and indicating that it is appropriate to begin reducing the degree of stimulus. We warned in our prior IMT against any upgrade in GDP growth. The ultimate outcome was beyond our expectations, which dragged down USDCAD to 0.9980 and AUDCAD below 0.9290 from 0.9370. Our followers on twitter http://twitter.com/alaidi were told of the upgrade 7 seconds after the release as well as the 0.9980 and 0.9290 targets in USDCAD and AUDCAD. Oil remains below 83.60 resistance. Any further retreat in equities will further drag on AUDCAD towards 0.9240, while USDCAD may find stabilization at 0.9960-70 before regaining 1.0130 according to weekly chart.