Friday January 25th, 2019

The US Dollar Index rallied sharply yesterday when the EUR fell to new lows on comments by European Central Bank President Draghi that interest rates in Europe might be lowered. Plus, US Initial Jobless Claims shocked the market by dropping to levels not seen since 1969, despite 25,000 government employees filing claims. Industrial and housing numbers have been weak, but the more important consumer employment and sales numbers are strong. This morning the USD Index is falling back, but the stock market is forward looking and it’s predicting future strength.

CAD is strong this morning and appears very constructive. Commodity prices across all sectors including grains, precious and base metals, and energy are building long-term support after years of declines. Look for a quiet pull-back today, towards overall long-term base-building support going forward.

ECB President Draghi expressed concerns over the European economy due to trade, Brexit and slow internal growth. Fears of inflation have subsided and there is greater downside risk to the economy. Inflation fears have given way to a need for economic support. The EUR is up this morning; the overall trend is down.

Key Economic Numbers:                    Forecast   Previous

None that are important today