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According to Hong Kong Stock Exchange filings, HSBC Holdings (00005.HK) repurchased 358,400 shares on the Hong Kong Stock Exchange on September 2 for HK$57.7 million; on the same day, it repurchased a total of 10,000 shares on other exchanges for £153,889.54.On September 3rd, it was reported that South Koreas semiconductor exports surged 209% year-on-year in August, reaching a record $46.65 billion, accounting for 47.5% of total merchandise exports that month. This was mainly driven by demand for artificial intelligence infrastructure. However, such rapid growth has also raised concerns about future trends. Moodys Analytics economist Dave Chia stated, "A gradual slowdown is manageable, but a sudden halt is another matter, because the South Korean economy is already operating at two speeds, and the industries that will need to fill the growth gap are precisely those currently under pressure." Monetary policy may also limit the buffer. The Bank of Korea raised interest rates for the second consecutive month in August, and Chia warned that if monetary policy continues to tighten while chip demand cools, then "this windfall will fade when domestic demand is insufficient to take over." Other more traditional industries are also struggling with the pressure, with automobile exports falling 29.8% year-on-year in August. Chia also stated that factors such as US tariffs and the shift of production to US factories constitute more persistent headwinds.The China Earthquake Networks Center automatically determined that an earthquake of approximately magnitude 4.2 occurred near Gar County, Ngari Prefecture, Tibet, at 16:16 on September 3. The final result is subject to the official rapid report.The final reading of the UKs August services PMI will be released in ten minutes.On September 3, local time, Ding Xuexiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, co-chaired the 13th meeting of the China-Russia Investment Cooperation Committee with Russian First Deputy Prime Minister Manturov in Vladivostok. Ding Xuexiang offered suggestions for further deepening bilateral cooperation: First, strengthen planning and policy guidance, conduct in-depth industrial alignment and project promotion, and jointly support the deepening and solidifying of investment cooperation between enterprises of both sides. Second, promote the implementation and effectiveness of key projects, effectively leverage their demonstrative role, and continuously enhance the scale and level of investment cooperation between the two countries. Third, expand the breadth and depth of cooperation, continuously consolidate cooperation in processing and manufacturing, engineering and infrastructure, and strengthen pragmatic cooperation in more areas such as green industries and the digital economy. Fourth, strive to resolve outstanding difficulties and problems, properly address the practical concerns of enterprises of both sides, and jointly create a better business environment.

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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