Weekly Economic Update

For the week of September 15 – 19, 2014

In Canada this morning, Existing Home Sales will update for August after showing an increase of 0.8% throughout July. Going into today’s release, existing home sales have increased in six straight months. The Bloomberg Nanos Confidence Index will update for the period ending September 12, 2014 after releasing at 59.1 in the latest update. South of the border, Empire Manufacturing has released at 27.54 for September, beating the expected release of 15.95. This is the highest the index has been since September 2004. Later today, Industrial Production is forecast to show a gain of 0.3% for August after an increase of 0.4% in the previous month. Capacity Utilization is expected to increase slightly to 79.3% for August.

Focus this week throughout Canada falls on the Manufacturing Sales data on the schedule for tomorrow, followed by an update to CPI for August on Friday. The CPI is forecast to show no change throughout August after falling by 0.2% in the previous release. The Consumer Price Index continues to play a key role in the Bank of Canada decisions. The next Bank of Canada announcement isn’t until October 22, 2014, however the central bank is looking for consistent strength throughout the economy before changing their neutral stance, beginning with CPI figures this week.

It is a busy week on the economic calendar throughout the United States. Tomorrow, an update will be made to the Producer Price Index with expectations to see no change throughout August following an increase of 0.1% in the previous month. Excluding food and energy, the index is expected to gain by 0.1%. On Wednesday, the CPI is expected to remain unchanged throughout August while The Federal Reserve is scheduled to make their next rate announcement. The policy rate is forecast to remain at 0.25% with another $10B in tapering split between treasuries and MBS purchases.

In the currency markets, the Canadian dollar has made slight gains against its U.S. counterpart in early trading this morning. Moving forward, we may see the CAD continue to struggle against the USD throughout the rest of the year. The United States is on track to consider rate increases in the first half of 2015, a fairly strong economic outlook while there are still mixed reviews for the outlook of the CAD and the Canadian economy. The CAD will focus on the Canadian CPI data on the schedule this week but will also be left vulnerable to the handful of key releases out of the United States. Strong data this week could continue to push the USD even further against the struggling CAD.

Todays expected range: 1.1030 – 1.1130

Source: Bloomberg

Posted by Concentra Financial Markets

Weekly Economic Update

For the week of September 8 – 12, 2014

In Canada this morning, Building Permits have increased by 11.8% on a month over month basis for July, beating economic expectations calling for a drop of 5.0%. The unexpected jump brought building permits to a record in July which was led by condos and apartments in Toronto and Vancouver. The previous months Building Permits have been revised upwards to show a gain of 16.4%. Later this morning, the Bloomberg Nanos Confidence Index will update for the period ending September 5, 2014 after releasing at 59.0 in the most recent update. South of the border, Consumer Credit is forecast to release at $17.275B in July after releasing at $17.255B in the previous month.

Focus this week throughout Canada falls on updates to Housing Starts for August and the New Housing Price Index for July. Housing Starts are expected to release at 195.0K for August, slightly below the amount from the previous release of 200.1K. The New Housing Price Index is forecast to rise by 0.2% for July, matching the gain in the previous month. It should a bit more of a quiet week compared to last which included the Bank of Canada Rate Announcement and Employment Data, two of the most important updates in the Canadian economy.

Throughout the United States this week, updates will be made to Wholesale Inventories, the Monthly Budget Statement, Retail Sales, and the University of Michigan Confidence Index. Wholesale Inventories are forecast to increase by 0.5% throughout July, following a gain of 0.3% in the previous update. Focus will fall on the August Retail Sales data scheduled to release on Friday with economic forecasts calling for a gain of 0.6% following no change in the latest update. All data out of the U.S will be important as we approach the next FOMC Rate Decision scheduled for Wednesday, September 17th.

In the currency markets, the Canadian dollar has fallen against its U.S. counterpart in early trading this morning as oil prices continue to fall. The Building Permits data from this morning was not expected to impact the CAD, despite the strong release. With a fairly quiet week of domestic data on the schedule, the CAD will be left vulnerable to broader market movement and activity. Investors will be sure to keep an eye on data out of the United States as we approach the next FOMC Rate Decision. An aggressive tone from the Federal Reserve at the next announcement would likely push the USD even further ahead of the Canadian dollar.

Todays expected range: 1.0862 – 1.0962

Source: Bloomberg

Posted by Concentra Financial Markets

Reliable and Secure Online FX Trading for Credit Unions

487806549Our  two-tiered foreign exchange (FX) trading platform allows credit unions and credit union members to manage their foreign exchange needs online.

As a reliable and secure trading experience, the Tier I – Concentra FX* offers the following benefits to your credit union:

  • enhanced FX risk management
  • access to a variety of transactions (Spot, Forward, Swap and Order)
    • Watch this demo video to see how easy it is to do a spot transaction
  • USD/CAD, EUR/CAD currency trading
  • competitive rates sourced from multiple liquidity providers
  • same day settlement**
  • extensive analysis with comprehensive report functionality
  • daily foreign exchange market analysis

Concentra FX is truly a no hassle straight-forward FX trading system. Want to know what a user thinks of it? Check out our conversation with Andy Wu of Conexus Credit Union from the blog post last week.

Providing competitive FX solutions to credit unions is what we do. Contact us at Concentra FX team or 1-306-566-1747.

Happy trading!
Heather Verkoczy, Foreign Exchange Services Manager
Concentra Financial
1-306-566-1747

*The trading platform is open in accordance with FX international markets. Trades can be booked between Sunday at 5:00 pm EST and Friday at 5:00 pm EST.

**Same day settlement not available in all provinces.

Weekly Economic Update

For the week of September 2 – 5, 2014

In Canada this morning, the RBC Canadian Manufacturing PMI will update for August after releasing at 54.3 in the previous announcement. The Index is currently sitting at the highest level since hitting 55.6 back in October of 2013. South of the border, Markit US Manufacturing PMI is forecast to remain at 58.0 throughout August. ISM Manufacturing is expected to decrease slightly from 57.1 to 57.0 for August while ISM Prices Paid is forecast to drop from 59.5 to 58.5. Later this morning, Construction Spending is expected to show an increase of 1.0% throughout July after falling by 1.8% in the previous month.

It is a busy week throughout Canada, headlined by the Bank of Canada Rate Decision tomorrow followed by August employment data scheduled to release on Friday. The Bank of Canada may hint at a more hawkish tone after the strong revision to the previous employment data. The Unemployment Rate is forecast to remain at 7.0% while the Net Change in Employment is only expected to increase by 9.5K after gaining by 41.7K in the latest release.

Throughout the United States this week, focus falls on the Employment data scheduled for Friday. The Change in Nonfarm Payrolls is expected to increase by 225K following the gain of 209K in the previous release. The Unemployment rate is expected to fall slightly from 6.2% to 6.1%. Also on the schedule for this week, Factory Orders are forecast to rise by 11.0% for July after gaining by 1.1% in the previous release.

In the currency markets, the Canadian dollar has struggled against its U.S. counterpart in early trading this morning, losing most of the gains made back on August 27. The next risk to the CAD comes with tomorrow’s rate announcement, where it is expected to see the Bank of Canada hold their neutral tone as they continue to be very cautious about sounding too aggressive on the Canadian economy. Focus will quickly shift to the employment data scheduled for Friday as it remains a strong indicator of economic performance out of both Canada and the United States.

Todays expected range: 1.0870 – 1.0970

Source: Bloomberg

Posted by Concentra Financial Markets

What are the Advantages of Online Currency Trading?

In Conversation with Andy Wu of Conexus Credit Union

465187851-wOne of the first credit unions to use the Concentra FX online currency trading platforms was Conexus Credit Union. Let’s check out what Andy Wu, Financial Analyst at Conexus shares with our Foreign Exchange Services Manager, Heather Verkoczy about the advantages that his credit union has experienced using the platform.

Andy, let’s start with what your credit union members are looking for in foreign exchange services.

Our members value convenience and cost in foreign exchange services. This means convenient foreign exchange transactions at competitive, up-to-the-minute rates.

The world is becoming more streamlined and technical and it seems foreign exchange is no exception with a movement towards electronic trading becoming more popular. Conexus has adopted the Concentra FX web-based foreign exchange trading platform as a solution for your credit union. What have been the results for your members? For your credit union?

Our members benefit from being able to get this service at their credit union and not have to go elsewhere while the competitive, up-to-the minute rates help keep them at our credit union.

From the business perspective, the web-based tool also allows our Corporate Finance department to actively book offsetting trades required to manage foreign exchange risk at the corporate level.

Efficient internal procedures and processes are important to business success. How has online trading platform enhanced these around your foreign exchange business?

As mentioned previously, the online trading platform helps the Corporate Finance department manage the credit union’s foreign exchange risk. The platform offers the capability to book trades throughout the day and that helps us manage the risk. This is especially the case since we have same day cash settlement, rather than the standard T+1 (cash settlement the next business day).

Can you explain more about the advantage of the same day cash settlement?

This is one of my favourite features of the trading platform. Same day cash settlement helps us manage our cash position efficiently and effectively. One daily sweep of our account is very convenient.

What patterns, if any, do you find with commercial clients and their trading habits? Do you find having a platform available whenever the market is open to be an advantage in meeting members FX needs?

Many commercial members convert to and from USD as required to efficiently and effectively run their operations. We currently have one commercial member piloting the Concentra Tier II platform (Credit Union FX). We’ve received feedback from the member that they enjoy the ability and convenience to track live foreign exchange pricing and lock in a live rate as required.

Do you find Concentra pricing competitive for your credit union and for your members?

I think Concentra’s pricing is competitive given the functionality and same day cash settlement.

Would you recommend this service to other credit unions?

Certainly. It is an easy and intuitive platform.

I would like to extend a big thanks to Andy for sharing the Conexus member and credit union experience with us. If your credit union is interested in learning more about our foreign exchange platform, contact us at Concentra FX team or 1-306-566-1747.

Heather Verkoczy, Foreign Exchange Services Manager
Concentra Financial
1-306-566-1747

Weekly Economic Update

For the week of August 25 – 29, 2014

It’s a quiet day in Canada this morning, with only the Bloomberg Nanos Confidence Index set to be released for the week of August 22. This is a weekly survey indicating consumer’s thoughts on the strength of the economy, job security and real estate. Last week’s index landed at 58.8, indicating there is a more positive than negative outlook. South of the border, there are a number of releases scheduled for the day. The Chicago Fed National Activity Index released this morning at 0.39, significantly beating expectations of 0.20 for the month of July and much higher than last month’s 0.12. This positive value indicates above-average growth in the economy. The Dallas Fed Manufacturing Outlook level of General Business Activity is expected to decline down to 12.5 in August from 12.7 in July indicating sentiment of manufacturers in the Texas area has slightly declined. Also on the agenda is New Home Sales with surveyed results expecting a 430K increase in sales or 5.9% over the month of July. Economists hope the housing market has turned around from last month when new home sales declined 8.1%, lagging behind the increased factory activity in the U.S. economy.

The Kansas City Fed’s annual economic conference in Jackson Hole, Wyoming has wrapped up with a few statements from Fed Chairwoman Janet Yellen gaining some grounds. Yellen noted the job market has improved faster than expected over the year and that the significant slack found earlier in the year (which goes hand-in hand with low interest rates) may not be the case anymore. Quantitative Easing is expected to end in October and with the jobs outlook improving and inflation higher we may see indication of rising rates earlier than mid-2015.

Headlines throughout Canada this week include updates to the Current Account Balances for the second quarter of 2014, released on Thursday. Economists expect -$11.6B, minimally changed from Q1’s -$12.4B. Friday’s releases include GDP, Industrial Product Prices and the Raw Material Price Index. Canada’s economic growth for Q2 is expected to advance 2.7%, up from first quarter’s sluggish growth of just 1.2% blamed on the harsh North American winter. Over June, the economists expect the economy to have advanced 0.2% and 3.0% on a year-over-year basis.

There are many releases throughout the United States this week, with focus falling mainly on Durable Goods Orders, Housing Prices, and Consumer Confidence on Tuesday and Jobless Claims and GDP on Thursday. GDP is expected to advance 3.9% on a quarter-over-quarter basis, down from 4.0% from April through June. So far the U.S. economy is expected to expand 3% in Q3 according to estimates of 76 economists.

In the currency markets, the Canadian dollar has gained 0.1% against its U.S. counterpart in early trading this morning. Governor Poloz speaks today at the Canadian Association of Business Economists titled on “Integrating Uncertainty and Monetary Policymaking: A Practitioner’s Perspective” however there will be no sharing of the presentation. Investors will be looking towards the GDP this week out of both Canada as the next piece of major economic data.

Todays expected range: 1.0940 – 1.1040

 Source: Bloomberg

Posted by Concentra Financial Markets

Can We Take Your Order?

471920189Order, hedge, aggregate …sounds like a bunch of jargon, right? Maybe. But, a little jargon is necessary and getting to know these terms can help you talk to your members about foreign exchange trading.

An Order allows your member to take advantage of short-term market fluctuations by buying or selling funds at a specific target exchange rate. When an Order is placed, the member outlines the amount of funds to buy or sell and the specific exchange rate at which to buy or sell. Once the market hits the target exchange rate, the order is ‘filled’ and settled as a Spot transaction.

Generally, Orders are placed with one of two instructions:

  1. Good until filled or cancelled
  • the Order remains outstanding for as long as it takes for the market to hit the targeted exchange rate with the added flexibility to cancel the Order at any time
  1. Good until a specific date and time
  • the Order will fill if the market hits the target exchange rate or automatically expires on the date and time specified

Business owners who are buying and selling products in the U.S. require foreign exchange services. Orders are a great tool that allow business owners to source specific exchange rates without spending valuable time watching the market.

Would your credit union like to add foreign exchange services to your menu of offerings? With our industry-leading foreign exchange services and experts, we can make that easy and profitable for your credit union. Find out how by contacting the Concentra FX team or 1-306-566-1747.

Weekly Economic Update

For the week August 18 – 22, 2014

In Canada this morning, International Securities Transactions have released at -1.07B for June, below expectations of 5.00B. Global Investors cut their holdings of Canadian government bonds by a record in June as they dropped a total of $9.42 billion from sales and maturities. Later today, the Bloomberg Nanos Confidence Index will update for the period ending August 15, 2014 after releasing at 58.6 in the most recent update. The Confidence Index has fallen in the last three weekly updates. It is quiet south of the border with only one release on the schedule this morning. The NAHB Housing Market Index is forecast to remain at 53 for June. A reading above 50 on the Index suggests that more builders view conditions as good than poor.

Headlines throughout Canada this week include updates to the Consumer Price Index and Retail Sales data, both scheduled to release Friday, August 22. The CPI is forecast to remain unchanged on a month over month basis and Retail Sales are expected to show a gain of 0.3%. Following last week’s upward employment revision, strong CPI data this week could provide optimism going into the next Bank of Canada meeting scheduled for early September.

Throughout the United States this week, focus falls on the CPI and Housing Starts updates scheduled to release tomorrow followed by Existing Home Sales on Thursday. The CPI is forecast to show a gain of 0.1% on a month over month basis while Housing Starts are expected to show a gain of 8.1%. The next Federal Reserve Announcement is schedule for September 17, 2014, but this week’s CPI data will play a key role in the decision. Employment data and CPI data are often regarded as the two most important pieces of economic data that factor into the rate decisions.

In the currency markets, the Canadian dollar has continued to gain against its U.S. counterpart in early trading this morning following the revised employment data on Friday. Investors will be looking towards the CPI data out of the United States as the next piece of major economic data. It could be a volatile week in CAD trading with multiple pieces of economic data on the schedule with potential to impact the CAD/USD trading range.

Todays expected range: 1.0836 – 1.0936

Source: Bloomberg

Posted by Concentra Financial Markets

Moving Forward On Foreign Exchange

Forward, outright, hedge…sounds like a bunch of jargon, right? Maybe. But, a little jargon is necessary and getting to know these industry terms can help you talk to your members about foreign exchange trading.

465666525

A Forward contract, also known as an Outright contract, is an agreement to exchange one currency for another at a future date.

To demonstrate how this process works, here is an example scenario:

On August 1, 2014 a member books a forward contract to sell USD $250,000 on value date December 31, 2014 at a locked in forward rate of 1.0945. Regardless of the spot rate on December 31, 2014 the member will sell the USD funds and consequently buy the CAD funds at the rate of 1.0945 valued at $273,625.00. If on December 31, 2014 CAD appreciated/strengthened against USD to 1.0850 and the forward contract hadn’t been utilized, the member would have only received CAD funds of $271,250.00.

Business owners who are buying and selling products in the U.S. require foreign exchange services such as Forward contracts. These are great tools to mitigate foreign exchange risk by locking in a competitive rate today for a future transaction.

Would your credit union like to add foreign exchange services to your menu of offerings? With our industry-leading foreign exchange services and experts, we can make that easy and profitable for your credit union. Find out how by contacting the Concentra FX team or 1-306-566-1747.