The EUR/CAD pair traded near multi-year highs after a strong sell-off in Brent crude (yellow line, inverted). However, buying pressure seems to be easing and German/Canadian 2y yields show a strong divergence with the current exchange rate.
Brent is trading at $33, well below the profitability threshold of US oil producers but above the cost base of Saudi Arabia and Russia (which lies around $10-$15 per barrel.) Any push below $27 (a major support for oil) may be therefore capped, especially when demand increases after the coronavirus threat gets under control.
Economic surprises and positioning for both currencies are around neutral.
News narrative is slightly more bearish for the euro after today's ECB meeting missed market expectations for a coordinated move of the ECB and the EU.
Brent is trading at $33, well below the profitability threshold of US oil producers but above the cost base of Saudi Arabia and Russia (which lies around $10-$15 per barrel.) Any push below $27 (a major support for oil) may be therefore capped, especially when demand increases after the coronavirus threat gets under control.
Economic surprises and positioning for both currencies are around neutral.
News narrative is slightly more bearish for the euro after today's ECB meeting missed market expectations for a coordinated move of the ECB and the EU.
