Major Overnight Headlines
* Key parameters of stress test exerceise to be announced by the end of January, Draghi says
*Germany’s IFO Business Climate Index climbs to 109.3 in November, more than expected
The weak CAD was a bigger focus for us than the EUR during the London morning, ahead of the October CPI data due this afternoon. We look for anything between 20 and 40 pips of immediate upside in USDCAD this afternoon if core YoY surprises to the downside in a 1.0%-1.1% range, relative to our economists’ expectations for a 1.2% print. Purely from an FX perspective, we think the decline in core YoY price pressures would have to be materially lower than the expected 0.1% drop to make a compelling case for a move to above 1.0600 as soon as today.
Read the full report: FX Daily
BMO