Investors will be monitoring the FOMC’s rate decision closely this afternoon (2 p.m.). Since the last meeting that took place on September 17, inflation has remained below the 2% target, and this could allow the Fed to remain dovish, in spite of improving job market figures. Lower inflation has resulted in lower bond yields. Since mid- September, the 10-year bond yields of both U.S. and Canadian governments have fallen by close to 0.30%.
Even though the Fed’s statement will cause a lot of volatility in the FX markets, the approval given by the Competition Bureau for the merger between Tim Hortons and Burger King supports the loonie. The CB Consumer Confidence Index numbers released yesterday that were above expectations also caught our attention. It would seem that an improving job market, coupled with lower gas prices at the pumps, are helping U.S. consumers, who posted their highest level of confidence since October 2007.
At this time, the loonie and the euro are stable, while crude oil and European and Asian markets are all posting gains. Emmanuel Tessier-Fleury
Range of the day: 1.1085-1.1220
Range of the next 5 days: 1.1050 – 1.1300
