USD/CAD extends is extension from the 1.20 area, set to go higher? USD/CAD rallied in an extension of the October recovery Central Bank divergences killing the Loonie USD/CAD hit fresh highs overnight on the back of the ECB meeting, extending the BoC's fuelled decline in the loonie while markets get the green light to continue chasing the Trump trade. Currently, USD/CAD is trading at 1.2850, up 0.03% on the day, having posted a daily high at 1.2855 and low at 1.2845.
ECB: Dovish taper – BBH Will the greenback continue to attract demand?
USD/CAD rallied from 1.2450 on the 20th Oct and completed the move overnight from a cent high to close at 1.2849 in the NY session. The BoC has recognised that the Canadian economy has come off the boil and it has decided to adopt a ‘wait and see’ approach to monetary policy. “Expectations for additional tightening before year-end to follow up the Jul and Sep moves have been left in the lurch and the CAD looks set to extend its correction from th..Read More →

Japan will on Friday release September figures for consumer prices, highlighting a modest day for Asia-Pacific economic activity.
Overall nationwide inflation is expected to hold steady from the previous month at 0.7 percent on year, as is core CPI.
Australia will provide Q3 numbers for producer prices; in the previous three months, producer prices were up 0.5 percent on quarter and 1.7 percent on year.
Singapore will see Q3 numbers for unemployment and September data for producer prices. The jobless rate expected to hold steady at 2.2 percent, while producer prices were up 1.0 percent on month and 4.9 percent on year in August.Read More →

Brazilian beverages company Ambev's adjusted net income, which disregards positive or negative effects from non-recurring items, rose 1.2% in the third quarter, to R$ 3.237 billion (US$ 997.72 million), on an annual basis. The result was above the estimates. Analysts projected an 18.59% drop, to R$ 2.492 billion.
The result was influenced by the organic growth of the EBITDA and the reduction of financial expenses, which were partially offset by the negative impact of the currency conversion, the appreciation of the Brazilian real, and a higher tax rate.
Taxes reflected significantly in unadjusted net income, which fell 95.7%, to R$ 136.5 million in the quarter on an annual basis. Income tax and social contribution expenses in the period were R$ 2.788 billion.
In the financial statement, the company notes that the effective tax rate increased from -32.4% to 95.3% in the comparison between the third quarter of 2016 and the same period in 2017, due to the “difficult comparison” be..Read More →

The Federal Open Market Committee meet next week (November 1) There are the odd few previews about, here is one via Société Générale that very accurately represents the consensus view (spoiler … could be fairly lacklustre)
Bolding mine:
Summary: Markets sit and wait for President Trump to announce his pick for Fed Chair, while Fed officials wait and wish for another inflation report they hope will allow them to raise rates in December. Against this backdrop, and with balance sheet normalization underway, the November 1 FOMC meeting could be fairly lacklustre. We expect some tweaks in the statement with respect to the economic assessment but see few reasons to make any significant changes.
And:With the balance sheet plan underway, no updated economic projections at this meeting, and no press conference from Chair Yellen, the November 1 FOMC meeting seems likely to lack the same fireworks as other meetings this year.
–That all sounds reasonable to me.Read More →

Brazilian miner Vale's net income increased 3.9-fold in the third quarter compared to the same period in 2016, totaling R$ 7.143 billion. In comparison with the previous quarter, Vale's profit rose 119-fold. In U.S. dollar, net income totaled US$ 2.230 billion, also up 3.9 times, but below the estimates (US$ 2.56 billion).
According to the miner, the result was favored by non-cash gains in the monetary and exchange variations in the quarter. The company lists the impact of US$ 452 million in foreign exchange variations due to the appreciation of the Brazilian real against the U.S. dollar and US$ 295 million in currency and interest rate derivatives.
The company's net operating revenue grew 31% in the fourth quarter, from R$ 21.831 billion a year earlier to R$ 28.6 billion in the third quarter of 2017. In U.S. dollars, net operating revenues totaled US$ 9.050 billion in the quarter, a 41.4% increase, in line with estimates (US$ 9.049 billion).
Vale's adjusted EBIT..Read More →