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EU official: We will clearly define which corporate structures are permitted, particularly in terms of control and ownership.On July 22, Joseph Lavorgna, chief U.S. economist at Sumitomo Mitsui Banking Corporation, stated that policymakers will lose hard-won credibility if inflation does not slow. In a report, Lavorgna noted that in the past 70 years, core inflation has only declined by 0.9% or more year-on-year six times. In each of those instances, the slowdown in inflation was due to the Federal Reserve tightening policy. Lavorgna said, “The longer the Fed waits, the greater the probability that interest rates will have to rise above what is necessary. That’s why so many tightening cycles have ended tragically. Chairman Warsh understands this.” Both WTI and Brent crude oil prices rose by nearly $1 in the short term, currently trading at $87.6 per barrel and $91.06 per barrel respectively.July 22 - On July 22, the Bulgarian Parliament voted to approve the deployment of up to eight U.S. Air Force KC-135 aerial refueling tankers and their crews, up to 250 U.S. military personnel carrying personal weapons and ammunition, and related airport equipment at Bezmer Air Base from July 24 to October 1, 2026.July 22 – According to the Wall Street Journal, AMD (AMD.O) and Anthropic have signed a multi-billion dollar AI server collaboration agreement. Under the terms of the agreement, Anthropic will procure up to 2 gigawatts of AMDs latest generation Instinct MI450 chips for its data centers starting in the first half of 2027, and will lease some computing power through other large cloud service providers or new cloud vendors. AMD will invest up to $5 billion in Anthropic upon reaching certain deployment milestones, marking its first investment in an AI company. AMDs CEO stated, "We have always been very keen to be a key partner in Anthropics infrastructure, and the engineering teams from both companies have been working together for some time."

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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