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On April 13, the State Council Information Office held a press conference in Shanghai to introduce Shanghais high-level opening-up and related matters. This was the first stop of the State Council Information Offices series of interviews on the theme of the 15th Five-Year Plan. Wu Wei, Standing Committee Member of the Shanghai Municipal Committee and Executive Vice Mayor of Shanghai, stated at the conference that during the 14th Five-Year Plan period, Shanghais GDP ranked among the top five cities globally, and its total port trade volume remained the highest in the world. This year marks the start of the 15th Five-Year Plan, and Shanghais expected GDP growth target is around 5%. Regarding economic growth in 2026, he expressed confidence that Shanghai would achieve its expected growth target of around 5% for the first quarter and the whole year.Anthony Whelan, a former aide to European Commission President Ursula von der Leyen, will lead the powerful EU competition regulator.US President Trump retweeted a New York Post article titled "Trump cleverly debunks Irans bluff—he himself blocked the Strait of Hormuz."April 13th - Pantone Macroeconomics reports that the UK job market remained stable in March despite heightened geopolitical uncertainty. According to the Centre for Economic Researchs employment report, the number of permanent job openings in the UK remained at its highest level since September 2022. Furthermore, the Centre for Economic Researchs data was collected between March 12th and March 25th, a period before the US and Iran reached a preliminary ceasefire agreement, which may have provided some support to market sentiment. However, geopolitical tensions could still put pressure on the labor market. Given the difficulty in quickly resolving the Middle East conflict and the potential for prolonged high energy prices, we still expect hiring activity to remain subdued in the coming months.Germanys Ministry of Economic Affairs: In the best-case scenario, energy and commodity prices will gradually return to normal this year.

USD/CAD declines to 1.3500 on firmer Oil prices, BoC concerns over US inflation, and Fed Minutes

Daniel Rogers

Apr 10, 2023 14:35

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The USD/CAD maintains losses close to 1.3500, shattering a four-day winning trend, as traders brace for key Easter Monday data/events on major bourses. However, the recent decline in the Loonie-U.S. dollar exchange rate may be due to the increase in the price of WTI petroleum oil, Canada's primary export. In contrast to the recent increase in ardent Fed forecasts, the Bank of Canada's (BoC) dovish bias poses a challenge to pair sellers.

 

After increasing for three consecutive weeks, WTI crude oil prices gain 0.61 percent intraday near $80.00. Recent increases in the price of black gold may be due to geopolitical concerns surrounding China and Taiwan. In addition to the supply cut by OPEC+ and the faltering US dollar, the energy benchmark is sustained by the supply cut by OPEC+ and the weakening US dollar.

 

However, the US Dollar Index (DXY) has fallen for three consecutive weeks and is under pressure near 102,000.

 

Fears of higher Fed rates versus inaction from the Bank of Canada (BoC) grew after the upbeat US Jobs report versus the lack of significant positives in the March Canadian jobs report.

 

As a result, the CME's FedWatch Tool indicates a 69% chance of a 0.25 basis point rate hike in May, up from 55% prior to the US employment report.

 

Canada's headline Net Change in Employment increased to 34.7K in March from 21.8K in February, compared to the market consensus of 12K, while the Unemployment Rate came in at 5% versus the analysts' estimate of 5.0%. During the specified month, the Participation Rate decreased to 65.6% from the expected and previous rate of 65.7%. In addition, the average hourly wage fell 5.2% year-over-year in March, down from 5.5% in February.

 

In contrast, the US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) increased by 236K in March, the lowest increase since January 2021 (considering revisions), compared to the expected 240K and the previous 330,000. Additionally, the unemployment rate fell from 3.6% to 3.5%, while the labor force participation rate rose from 62.6% to 62.6%. The annual wage inflation rate decreased from 4.6% to 4.2%, below market expectations of 4.3%.

 

Futures on US equities ended higher, but yields remain under pressure ahead of the crucial BoC monetary policy meeting, US inflation, and Fed Minutes. Given the dovish concerns from the Bank of Canada (BoC) and the likely hawkish comments in the FOMC Minutes, the USD/CAD may see additional gains, barring any unexpected developments.


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