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April 24 – According to Al Jazeera, Kenneth Katzman, a former Iran analyst at the Congressional Research Service in Washington, D.C., stated that while Iran has no new oil exports due to the U.S. blockade of Iranian ports, Tehran currently has 160 to 170 million barrels of oil "floating at sea" on ships around the world. Katzman said, "I learned from an Iranian professor that based on these inventories, despite the U.S. maritime blockade, Tehran could still have a revenue stream until August. Theres still a long time until August. Can Trump hold out until August? Probably not. So he may have to consider drastic escalation to get the results he wants, otherwise he will have to accept an agreement that is not as good as he envisioned."Bank of England Deputy Governor Briden: The stock market is currently too high and is expected to fall.On April 24th, it was learned from the State Taxation Administration that tax authorities are continuing their special campaign to address tax-related issues arising from irregularities in investment promotion, and are thoroughly rectifying tax-related problems associated with the "invoice-based economy." Invoice data shows that in the first quarter of this year, the invoice amount for six industries with a high concentration of enterprises involved in irregular investment promotion—including comprehensive utilization of waste resources, recycling of renewable materials, wholesale of mineral products, building materials and chemical products, organizational management services, information technology consulting services, and road freight services—decreased by 4.4% year-on-year, a decrease of 3.1 percentage points compared to the whole of last year. The rectification efforts were particularly effective in the central region, where the invoice amount for these six industries decreased by 6.7% year-on-year.April 24 - The State Council announced the appointment and removal of state personnel. Wang Wenling was removed from her position as Vice Chairman of the National Council for Social Security Fund.The Hang Seng Tech Index turned positive in the late morning session after falling nearly 2% earlier; the Hang Seng Index narrowed its losses to 0.31%.

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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