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On May 22, Nomura Securities predicted that the Federal Reserve will keep interest rates unchanged until 2026 due to rising inflation and weakening support for policy easing from Federal Reserve officials, reducing the likelihood of a near-term rate cut. "Incoming Fed Chairman Kevin Warsh may still have the incentive to ease policy, but recent data and comments from Fed officials make us doubt his ability to convince a majority of the Federal Open Market Committee to support rate cuts," Nomura said in a report on May 21. The firm had previously projected 25-basis-point rate cuts in September and December of this year.According to the Financial Times, the French finance minister stated that countries cannot decide whether to release more oil reserves until they understand how long the conflict with Iran will last.According to the Financial Times, JPMorgan Chase (JPM.N) is seeking to reduce its $4 billion exposure to private equity-related loans.According to the Financial Times, the European film industry is urging EU regulators to review the deal between Warner Bros. Discovery (WBD.O) and Paramount.On May 22nd, Nomura Securities analysts wrote in a report that NIO (NIO.N) needs to launch more popular models to further support its sales, market share, and profit margins. They stated that investors will be watching the performance of the ES9, which will be launched next Wednesday. Given the positive customer feedback in the ES9 pre-sale data, Nomura remains optimistic about the company and expects NIO to achieve sequential improvement in deliveries and financial data in the second half of this year. NIO will launch a five-seat version of the ES8 in the second half of the year and plans to launch three to five new models annually in the coming years. Nomura maintains its buy rating on NIO with a target price of $8.60. The stocks American Depositary Receipts closed at $5.60 yesterday.

Near 1.3600, USD/CAD Meets Difficult Resistance Amid a Weak USD Index and Rising Crude Prices

Daniel Rogers

Mar 29, 2023 14:32

USD:CAD.png 

 

Near 1.3600, the USD/CAD pair encountered resistance during the Asian session. As the US Dollar Index (DXY) appears vulnerable to further losses below 102.40, the Canadian dollar appears to have a sturdy downside bias. The USD Index has found support near 102.40, but a retracement is likely as risk appetite improves.

 

The USD Index is under intense pressure as a result of the decline in U.S. banking concerns. As reported by Reuters, US House Speaker Kevin McCarthy stated in an interview with CNBC on Tuesday that "at this time" there is no need for universal insurance on all bank deposits, reviving concerns of a banking crisis in the United States.

 

Tuesday's S&P500 futures remained predominantly constrained in response to House Speaker Kevin McCarthy's remarks. The Federal Reserve (Fed) is expected to maintain a consistent tone when announcing its interest rate decision at its May monetary policy meeting, despite the optimistic market sentiment.

 

In the interim, demand for U.S. government bonds remained low due to investors' expectation that the nation will emerge from its banking crisis sooner. This led to a rise in 10-year US Treasury yields to 3.57 percent.

 

According to Bloomberg, the Canadian Dollar remained volatile on Tuesday after Finance Minister Chrystia Freeland's announcement that dividends received by financial institutions from holding domestic equities will be considered business income. This will generate billions in tax revenue from banks and insurance firms that receive dividends from Canadian corporations.

 

Due to a weakening US Dollar and expectations of additional sanctions against Russia, the price of oil has risen to close to $74.00 on the energy front. The US Energy Information Administration (EIA) oil inventory data will be attentively monitored for additional guidance. As anticipated, the US EIA will report an increase of 0.187 million barrels in oil stocks for the week ending March 24.

 

Notably, Canada is the leading oil exporter to the United States, and rising crude prices would strengthen the Canadian Dollar further.

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