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August 25th - According to data platform Data.ai, AliExpress topped the Brazilian shopping download charts on the first day of its August sales promotion, surpassing platforms such as Meitu, Amazon, Temu, and Shopee. First-day sales surged 85% compared to the June promotion, with brand merchants, represented by Brand+, driving the growth. This year, AliExpress has increased its investment in the Brazilian market, resulting in explosive growth in both cross-border small parcels and large items from overseas warehouses, with Chinese brands continuing to grow.August 25th - A measure of underlying inflation by the Bank of Japan (BOJ) remains above its 2% target, supporting widespread market expectations of a September interest rate hike. The BOJ stated on Tuesday that its consumer price index, excluding fresh food and the effects of several government measures, rose 2.3% year-on-year in July. In contrast, the core inflation indicator (excluding fresh food only), released by the Japanese government last week, rose 1.8% year-on-year. These figures are part of a new batch of price indicators introduced by BOJ Governor Kazuo Ueda in March, designed to provide a more detailed view of underlying inflation trends. The data further indicates that underlying inflationary pressures remain strong. Businesses are facing rising costs due to energy prices driven by the Middle East conflict and are passing on these higher input costs to consumers. This result reinforces the BOJs view that greater vigilance is needed regarding upside risks to inflation. The market currently prices in an approximately 80% probability of a September rate hike by the BOJ.On August 25th, Commonwealth Bank economist Belinda Allen stated that the Reserve Bank of Australia (RBA) believes inflation risks are skewed to the upside, and the debate over the correct policy response is intensifying. She said, "Is the committee losing patience? Perhaps. Its also possible that this is a verbal intervention to ensure financial conditions remain tight until inflation makes more substantial progress." Allen added that current inflation data is insufficient to declare victory, although second-quarter inflation figures were lower than expected, a large part of which was due to the impact of volatile items, which are at risk of rebounding in the coming months.On August 25, the wife of a U.S. Army sergeant was deported back to Honduras on Monday, becoming the latest example of the Trump administrations immigration crackdown affecting the families of U.S. military personnel. A spokesperson for the Department of Homeland Security (DHS) stated that the wife of U.S. Army Sergeant Hedar Lionel Turcios Juarez "was deported from the United States on Monday" and returned to Honduras. According to the Associated Press, this is at least the seventh spouse or parent of an active-duty U.S. military member to be deported under the Trump administrations immigration crackdown. According to ABC News, Turcios Juarez served nine months in the Middle East after enlisting in the military and became a U.S. citizen in 2024.BHPs Australian port workers submitted a wage counter-proposal ahead of their next meeting on September 8.

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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