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The yield on Japans 30-year government bonds rose 2.0 basis points to 4.020%.As of 8:30 AM Beijing time, spot platinum rose 0.57% and spot palladium rose 0.54%.Spot gold and silver prices continued to decline; a chart provides a quick overview of the pre-market prices of precious metals, converted between domestic and international markets.The China Earthquake Networks Center officially reported that a 4.8-magnitude earthquake occurred at 7:44 a.m. on July 9 in Gao County, Yibin City, Sichuan Province (28.51 degrees north latitude, 104.68 degrees east longitude), with a focal depth of 6 kilometers.Artificial Intelligence: 1. OpenAI releases GPT-Live speech model. 2. OpenAI releases national security principles document. 3. Zhipu: Plans to raise over HK$31.4 billion through a share placement at a discount of approximately 13%. 4. Ministry of Industry and Information Technology issues risk warning: Claude Code contains a security backdoor that may leak sensitive user information. 5. US government approves OpenAIs public release of its GPT-5.6 Sol, Terra, and Luna models on Thursday. 6. SpaceX AI and Cursor release Grok AI model, named Grok 4.5, for legal and financial scenarios. 7. Meta announces plans to build a C$13 billion data center in Alberta, Canada. 8. AI chip startup Positron is in talks for approximately $750 million in funding, with a potential valuation of up to $5 billion. Integrated Circuits (Chips): 1. US media: Zhipu is evaluating the possibility of developing its own custom chips amid surging demand for its GLM series AI models. 2. Reports indicate that TSMC is significantly expanding its PIC production capacity, expected to reach 25,000 wafers per month by 2028. 3. Apple and Broadcom have reached a multi-year cooperation agreement worth over $30 billion. 4. SK Hynixs US IPO was reportedly oversubscribed by more than seven times. Other: 1. China Passenger Car Association: June retail sales of passenger cars reached 1.602 million units, a year-on-year decrease of 23.2%. 2. Teslas robotaxi plan is attempting a new rapid expansion strategy. 3. Blue Origin raised $10 billion at a valuation of $130 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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