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White House officials: US President Trump has made it clear that he does not support Israels annexation of the West Bank.On February 10th, Trump stated that he would begin negotiations with Canada regarding a bridge project connecting Michigan and Ontario, threatening to block its opening unless the United States receives full compensation and owns "half of the asset." Trump stated on social media on Monday: "I will not allow this bridge to open until the United States is fully compensated for everything we have given, and more importantly, until Canada treats the United States with the fairness and respect we deserve. We will begin negotiations immediately. Given how much we have given them, we should perhaps own at least half of this asset." Trumps remarks are the latest attack on Canada, as the US president escalates tensions with his major trading partner. The president has also attacked Canada over dairy import tariffs, calling them "unacceptable" and putting "our farmers at enormous financial risk."February 10th - According to foreign media reports, the UK Treasury will strengthen security measures for future fiscal activities to prevent a repeat of the premature leak of market-sensitive documents from last Novembers budget. Prior to this, the UKs National Cyber Security Centre conducted an internal review of information releases. The results showed that the full budget report from the Office for Budget Responsibility had been downloaded 24,701 times before Chancellor Reeves announced policy proposals. Furthermore, Reuters also obtained a copy of the March Spring Statement in advance and opened it 16 times during Reeves speech. To prevent similar incidents, documents to be released by the Office for Budget Responsibility in conjunction with the March 3rd Spring Statement will instead be published by the Treasury on the governments official website.On February 10th, the U.S. State Department announced that Secretary of State Marco Rubio will attend the Munich Security Conference in Germany from February 13th to 15th and meet with counterparts from various countries. Following this, Rubio will travel to Slovakia and Hungary to meet with government officials to advance regional security interests and discuss bilateral issues such as nuclear energy, military modernization, and NATO commitments. Just weeks ago, Trumps expressed interest in acquiring Greenland caused panic among U.S. allies. With two months until the Hungarian elections, recent polls show the ruling Fidesz party, led by long-time Trump ally Viktor Orbán, trailing the opposition. Trump expressed support for Orbán last week, who used similar nationalist rhetoric and took a similarly hardline stance on combating illegal immigration.Market news: In its latest tender offer, payment giant Stripes valuation is expected to climb to $140 billion.

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

 USD:CAD.png

 

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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