Well, in September they did anyway as they pumped C$10.8bn into the Canadian stock market. At the same time they reduced bond holdings by 3.8bn. Overall flows into Canada were up to C$8.36bn from C$2.08bn in August.
The news of the flows pairs with the moves in the Loonie at the beginning of September, when it fell from the 1.05’s down to 1.0180 over the course of two weeks. In amongst that was the FOMC meeting which obviously added to the moves. Since then we’ve seen the pair recover back up to 1.05.
The data underpins the willingness of money to flow into stocks and the greater that increases the more of a hit it will take when the buying runs out. As reader Anand points out
I was always taught that for a market to go up you need buyers, but for it to go down you don’t need sellers, just an absence of those same buyers.
It’s a very salient point as there is going to come a moment when the buyers are all up to their eyes in it and there’s no one left to keep buying. When that happens though is anyone’s guess but that time is coming.
In the meantime USD/CAD corporate orders have been seeing some action with bids getting chewed down at 1.0415 with further bids through 1.0405 ahead of the big figure. Decent bids are said to be building just under at 1.0395 with stops seen on a break of 1.0380
Offers have come down to 1.0475 but some still remain above 1.05 at 1.0520 and 1.0530
