Daily Forex Fundamental Overview

Fundamental Analysis

CAD

“Stripping out some of the noise in the report, the news wasn’t particularly constructive for the Canadian outlook. Export volumes continue to track year-on-year declines, while imports – a barometer for internal demand – remain anemic”.

- Nick Exarhos, CIBC

Canada’s trade balance advanced more than expected in October, official data showed on Tuesday. According to Statistics Canada, the country’s trade deficit narrowed to a seasonally adjusted C$1.1 billion in the reported month mostly due to the import from South Korea of a module for the Hebron offshore oil project in Newfoundland and Labrador. Market analysts expected the trade gap to narrow to C$2.0 billion after it hit a record high of C$4.4 billion in September. Back in October, Canadian imports dropped 6.3%, the biggest decline since January 2009, to C$44.7 billion, the lowest level since February 2015. However, excluding the above mentioned shipment, imports declined just 0.3% in the reported month. Still, even without this boost, the trade deficit would decrease to C$1.5 billion between September and October. Meanwhile, Canadian exports climbed 0.5% to C$43.6 billion. Excluding energy, they fell 0.3%. In volume terms, exports declined 0.7% in October, compared to September’s fall of 1.5%. On the positive side, the country’s exports to the US jumped 1.6% after falling 1.5% in September, the largest gain since March, while imports from the US were 0.1% down. Exports to non-US countries dropped 2.7%, led by Britain, whereas imports declined 16.7%.

EUR

“We’re looking at a nice positive outlier that built on stronger growth in the U.S. and more demand in emerging markets”.

- Carsten Brzeski, ING-Diba

Higher households and public sector spending helped to boost the Euro zone’s GDP growth in the Q3, official figures revealed on Tuesday. According to the second estimate published by Eurostat, the economy expanded 0.3% on quarterly basis in the Q3. That was in line with the first estimate and analysts’ expectations. However, on an annual basis, third-quarter GDP growth was revised up to 1.7% from the originally reported 1.6% gain. Second quarter economic growth was also revised up 0.1% to 1.7%. The advance in the Q3 was mainly driven by household spending , which increased 0.2%, and changes of inventories and public sector spending, each climbing 0.1% in the reported quarter. Exports and investment made a zero contribution to growth, while higher imports cut 0.1% from the final growth figure. All economies in the Euro zone grew in the Q3, with Slovenia, Greece and Portugal showing the highest economic growth. Back in the Q2, the French and Finnish economy contracted 0.1%. Other data released on Tuesday showed factory orders in the region’s biggest economy, Germany, jumped markedly in October. The Economy Ministry reported orders surged 4.9%, following September’s upwardly revised fall of 0.3% and surpassing the 0.6% rise forecast.

Download The Full Daily Forex Fundamental Overview