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On September 21st, a groundbreaking ceremony was held in Kaohsiung, Taiwan, for a new advanced packaging industrial park. TSMC plans to establish facilities there for technology verification and talent training. At the ceremony, the Deputy Mayor of Kaohsiung stated that TSMC will construct two buildings in the Baipu Industrial Park, including a technology verification laboratory and a talent training center. These facilities are expected to be operational by the fourth quarter of 2029. The Baipu Park covers a total area of approximately 88.7 hectares (approximately 219.2 acres), of which approximately 53.6 hectares are designated for industrial use.September 21st - According to Iranian sources on the 20th, Iranian Foreign Minister Araqchi will visit Qatar to discuss the regional situation. Reports indicate that Araqchi left Tehran on the evening of the 20th for New York to attend the 81st UN General Assembly. He will first make a brief stop in Doha, Qatar, to discuss the current regional situation. Qatari Foreign Ministry spokesman Majid Ansari stated on the 20th that Qatar is maintaining communication with the United States and Iran, pushing for the resumption of negotiations between the two countries. He said that several US government officials have indicated that the US hopes to reach an agreement and end the conflict. Speaking at the Qatar Economic Forum in New York, Ansari stated that Qatar has been exchanging views with the United States and Iran over the past few weeks, and Qatar is working to bridge its differences. However, he did not provide a timetable for resuming negotiations.On September 21, Vice President Han Zheng met with Australian House Speaker John Dick in Beijing. Han Zheng stated that China and Australia are important partners. Last July, President Xi Jinping met with Prime Minister Albanese, charting the course for further positive development of bilateral relations. China is willing to work with Australia, guided by the important consensus reached by the leaders of the two countries, upholding the principles of equality, seeking common ground while reserving differences, and mutually beneficial cooperation, to enhance strategic communication, deepen mutually beneficial cooperation, strengthen multilateral coordination, properly handle differences, and promote the building of a more mature, stable, and fruitful comprehensive strategic partnership between China and Australia. Dick stated that this visit allowed him to personally witness the deepening economic and trade exchanges and close people-to-people ties between the two countries, and he was pleased to see the stable and fruitful development of Australia-China relations. Australia attaches great importance to Australia-China relations and adheres to the one-China policy. The Australian House of Representatives is willing to strengthen dialogue and exchanges with China, expand pragmatic cooperation, and bring benefits to the people of both countries.New Zealand Prime Minister Lukeson: New Zealand has now ratified the free trade agreement with India.On September 21, following the turmoil at Situational Awareness, a hedge fund betting on artificial intelligence that resulted in massive losses for Jane Street, the Bank of England and the Federal Reserve have stepped up their scrutiny of banks exposure to large trading firms. Sources familiar with the matter said regulators are questioning global banks about their exposure to trading firms and market makers, including New York-based Jane Street and Ken Griffins Citadel Securities. These regulators had previously prioritized understanding banks exposure to so-called non-bank financial intermediaries. However, sources indicated that they have intensified their efforts to understand positions related to trading firms and market makers after this sell-off and Jane Streets losses. Regulators want information on these firms risk appetite, how banks exposure to them changes intraday, and how risk controls operate.

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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