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March 5th - According to the China State Railway Group, in response to the post-holiday travel peak for migrant workers, the railway department has taken multiple measures to strengthen transport capacity and station/train services to ensure the safe and orderly return of migrant workers to their jobs. This years Spring Festival travel rush saw the railway department focusing on the travel needs of migrant workers, implementing a pre-booking system for tickets, operating "point-to-point" special trains for migrant workers, opening green channels for migrant worker groups, holding special train job fairs, and strengthening transportation connections. More than 60 "point-to-point" special trains for migrant workers have been operated since the holiday, effectively supporting enterprises in resuming work and production and stabilizing employment.Ukrainian President Zelensky: In view of the situation in the Middle East, Ukraine has communicated with the United States about the possibility of changing the venue for the new round of Russia-Ukraine negotiations and postponing the negotiation time.Morgan Stanley became the latest Wall Street brokerage firm on Thursday to predict that the European Central Bank (ECB) will keep interest rates unchanged until 2026, citing potential inflation risks from the Middle East conflict. The firm had previously expected two rate cuts by the ECB in June and September, but now anticipates the central bank will postpone these cuts until 2027. Last month, Bank of America Global Research withdrew its 2026 rate cut forecast. Morgan Stanley analysts stated in a report, "Given the recent rise in energy prices, eurozone inflation is likely to rise above the ECBs target level for the remainder of this year." The analysts added, "By 2027, inflation may fall below target again, but this depends on a rapid normalization of the energy market."The onshore yuan closed at 6.9003 against the US dollar at 16:30 on March 5, up 117 points from the previous trading day.Germanys construction PMI for February was 43.7, compared to 44.7 in the previous month.

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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