Great results from the Business Outlook Survey

Out on Monday this week the BOS survey was excellent once again fro CAD, especially when you consider that this survey includes the period before the NAFTA deal was finalised. The outlook is very confident for Canada's businesses. For those who need reminding, the NAFTA deal is now called the United States-Mexico-Canada agreement (USMCA). You can see the full results of that survey here on the Bank of Canada's website. The net result of the survey has the summary that:

Responses to the autumn Business Outlook Survey indicate that near term business prospects continue to be robust. Strong demand and elevated capacity pressures support firm's investment and employment intentions

The immediate result of the survey was a bid in the Canadian dollar as the market starts to feel more and more confident about the BOC hiking rates next week on October 24. Or, rather, there is less and less dovish sentiment regarding any expected reticence to hike from the BOC.

I am expecting a bid to stay under CAD for the time being, Last night showed an unexpected draw in inventories from the private inventory data. See Eamonn's report here. Oil is bid, so that should create further support for CAD going into Friday where we have the final top tier data before next week. That data is the CPI and the retail sales. These will be eyed as the final tests before next week. A miss here is not going to alter expectations of a hike much, only a very large miss would. However, a beat will see the market bid CAD in probably the final push before next weeks meeting.

So, what is the takeaway?

1. Expect CAD to be bid today and tomorrow

2. Recognise Friday's significance for the CAD

What to do?

Today and tomorrow : look for weaker pairs to trade CAD against and then look for pullbacks on the charts. If you are struggling with your trading, check out Greg's superb video here. It will help you. Then, it is just a case of happy hunting and not doing anything crazy ;-)

Friday: recognise the significance of the data release and , in particular, the impact a large miss would have on the CAD