The CAD/JPY currency pair, which expresses the value of the Canadian dollar in terms of the Japanese yen, has been edging its way toward levels that were seen prior to the start of 2020. As stocks began to sour in February this year, the Canadian dollar also started to fall alongside other commodity currencies. Currencies such as the Japanese yen rallied, which was unsurprising to most traders given the reputation of the yen as a conventional safe haven.

From the start of the fourth quarter of 2019 into the first quarter of 2020, CAD was trading against JPY inside of the range of 80-85, with an approximate midpoint being at the 83 handle (as illustrated below). A stronger CAD is in most cases a constructive for risk assets such as equities, especially when set such strength is against JPY.

CAD/JPY Price Action in 2020

(Source: TradingView. The same applies to all subsequent price charts presented hereafter.)

From the level of 85 down to the lows in March this year at the 74 handle, the midpoint is around 80, which the current market price for CAD/JPY is perched just above. The question now becomes whether we will see further strength.

Certain commodity currencies such as the Australian dollar and New Zealand dollar were able to retrace their steps back to their previous highs (after also crashing in February and March). These two currencies have already rallied against USD and JPY (both conventional safe havens in their own right). The Canadian dollar has struggled against the Japanese yen, although, interestingly, CAD is currently as strong against USD as it was prior to the emergence of the COVID-19 pandemic which shook financial markets (including FX) this year.

USD/CAD Price Action in 2020

(USD/CAD is now trading at similar levels to 2019; the Canadian dollar has effectively won back all its

Rollercoaster moves in the natural gas market over the past few weeks are underscoring traders’ uncertainty about whether a frigid winter, muted output, and rebounding demand will send prices rocketing higher in the coming months.

Gas futures settled more than 7 percent higher on Monday, mimicking gains in oil and equities. But just two weeks ago, prices posted their biggest one-day loss in almost two years. Historical volatility has surged to levels not seen since late 2018, and implied volatility, a measure of how dramatic price swings may be going forward, is the highest in data going back to 2010.

Bullish bets on US gas have soared as traders wager on lackluster production and surging demand heading into winter. Liquefied natural gas exports are rising as consumption recovers from pandemic-driven lockdowns, and as terminals restart after storm-related outages and maintenance. Meanwhile, shale output remains subdued as drillers heed investor calls for financial restraint after this year’s oil-price crash.

Outsize moves in risk assets amid geopolitical turmoil have magnified the volatility in gas, while a hyperactive hurricane season has disrupted offshore production and LNG exports and triggered blackouts that curtailed gas demand for power generation.

“You’ve had a volatile market, but this is the icing on the cake,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. “Guys were stepping in to pick at the bottom.”

But as is often the case with the gas market, it all hinges on the weather. Though a La Nina pattern has emerged, which could lead to a chilly winter in the northern United States, brutally cold conditions are far from certain. A mild December, January, and February would limit gas demand for heating and curb withdrawals from underground storage, leaving the market oversupplied heading into spring.

Almost half of respondents

The UK economy continued its rapid rebound from the depths of the coronavirus lockdown in August, the latest official data on growth is expected to show on Friday, but many economists are braced for a grim winter as job losses mount.

a group of people standing in front of a building: Photograph: Justin Tallis/AFP/Getty Images

© Provided by The Guardian
Photograph: Justin Tallis/AFP/Getty Images

The Bank of England’s chief economist, Andy Haldane, predicted last week that GDP would be “only around 3-4% below its pre-Covid level” by the end of the third quarter, covering July to September.

That would imply further significant increases in the UK’s economic output since July, when output remained 11.8% below the level hit in February, according to figures from the Office for National Statistics. The full picture for the third quarter will not be evident until November when the ONS publishes initial GDP figures for September.

Andy Haldane wearing a suit and tie smiling and looking at the camera: Andy Haldane, chief economist at the Bank of England. Photograph: Sarah Lee/The Guardian

© Provided by The Guardian
Andy Haldane, chief economist at the Bank of England. Photograph: Sarah Lee/The Guardian

This week’s figures for August are likely to confirm that the UK enjoyed a historic bounceback in the summer, following the unprecedented 19.8% decline in output in the second quarter.

The recession across the first and second quarters was the deepest on record as the pandemic and lockdown froze much economic activity. The coming weeks will test conflicting interpretations of the pace of the recovery since then, and whether schemes such as the August “eat out to help out” subsidy for the stricken restaurant and hospitality sector are visible in broader economic figures.

Haldane is firmly in the optimists’ camp. He bemoaned recent media coverage, suggesting that a lack of “balance” in reporting may itself restrain the economy’s fightback.

“Now is not the time for the economics of Chicken Licken,” Haldane wrote, pointing to coverage of June growth figures that focused on the overall picture

Global fashion retailers face a potentially harsh winter, but at least they aren’t wasting the crisis.

Shares in Swedish clothing chain

Hennes & Mauritz

HM.B 6.04%

rose 8% in morning trading Thursday after it reported good news about September sales. Revenue was 5% lower in the month compared with a year ago—a sharp recovery from the 16% year-over-year drop for the three months through August that the company announced a few weeks ago.

H&M also beat earnings expectations for the summer quarter. The business made a pretax profit of 2.4 billion Swedish krona, or roughly $260 million, while analysts had thought it would barely break even. The same thing happened at Zara-owner


ITX 2.31%

the world’s largest clothing retailer by market value, and fast-fashion chain Primark, that both reported better-than-expected summer profit.

Global clothing brands have done a good job of controlling what they could during the pandemic. Despite widespread store closures in the spring, H&M ended August with the same amount of stock that it held a year earlier. Inditex, which has an especially flexible supply chain, is carrying one-fifth less. Having stores in Asia, where the pandemic first appeared, undoubtedly gave them more insight into what was coming next than regional retailers in Europe and the U.S. “They canceled orders early on and then were cautious about new ordering. So there has been less discounting and stock levels are better than expected,” said Aneesha Sherman of brokerage Bernstein.

The crisis has handed retailers leverage with landlords too. H&M negotiated rent cuts of up to 30% in certain markets and plans to close 5% of its stores in 2021 as it reverses decades of expansion. Inditex will shrink its physical network by a more dramatic 12% over the next two years as more sales move online.