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According to Politico: The U.S. Democratic Party plans to hold a new round of voting on Tuesday night local time on a bill to limit the presidents war powers.On April 28, the Congressional Budget Office (CBO) stated that recent tariff policy adjustments in the United States could increase the federal budget deficit by $1.1 trillion over ten years, but the exact figure is currently uncertain. CBO Director Swagel stated that the Supreme Courts ruling that Trumps use of emergency economic powers to impose tariffs was invalid will lead to a $2 trillion increase in the fiscal deficit over ten years; while other trade measures Trump has taken to date to compensate for this loss have added a total of $800 billion to $900 billion in revenue. Swagel stated, "Because the Supreme Court removed some tariffs, and the government reinstated some, the fiscal deficit over ten years will be about $1.1 trillion higher. The government has considerable power to impose new tariffs and adjust them, so its difficult to determine the exact deficit amount until the entire process is complete."On April 28th, German Chancellor Merz stated on the 27th that the United States lacks a strategic exit plan regarding the war with Iran. Speaking at an event at a high school in North Rhine-Westphalia, Germany, Merz said he couldnt see what kind of strategic exit plan the US would choose. He noted that Iran had been very sophisticated in negotiations, or rather, very sophisticated in refusing to negotiate, "letting the Americans go to Islamabad and leave empty-handed." Merz pointed out that once a war is started, "a way to exit must be found," and the US clearly lacks a strategy in this regard. He cited the USs actions in the wars in Afghanistan and Iraq as examples.On April 28, Pakistans Ministry of Information and Broadcasting issued a statement on the 27th denying Afghan media reports that Pakistan had launched airstrikes against a university and residential area in Kunar province in eastern Afghanistan. The statement called the reports "lies" intended to garner sympathy and conceal the Afghan governments support for the "Pakistani Taliban." The statement said, "Pakistans strikes were precise and based on intelligence."Oracle (ORCL.N), Borderplex, and Bloom Energy will power the Jupiter project using cleaner, more water-efficient fuel cell technology. Oracle stated that the Jupiter project will utilize up to 2.45 GW of Bloom Energys fuel cell capacity, covering all energy costs for the project. The project is expected to create 4,000 construction jobs and 1,500 permanent positions.

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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