SubscribeDaily Futures Commentary July 20, 2009
Monday, July 20, 2009
With the Bank of Canada set to meet tomorrow, today’s focus is on the Canadian Dollar. Overnight trading action indicates a higher opening for the Canadian Dollar spurred by higher expectations in the U.S. equity markets and firmer crude oil.
Investors should look for the September Canadian Dollar to open sharply higher at about .9069. Much of this rally overnight can be attributed to the unexpected news regarding the CIT Group. Late last week, investors were looking for this small business lender to file for bankruptcy protection after the U.S. government balked on a request to bail it out.
Over the weekend the CIT Group reached an agreement with bondholders to provide as much as $3 billion in emergency funding. With bankruptcy avoided for the time being, investors drove up equity prices and triggered greater demand for higher risk assets including the Canadian Dollar.
Earnings momentum is expected to continue this week as investors are betting that the trend that began last week will drive equity prices higher this week. Banks in particular have been the driving force behind the upside momentum. This week 30% of the …
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