EUR/USD 1.13868
0.059%
Gold 4029.80
0.723%
Oil 79.084
1.657%
USD/JPY 162.312
-0.083%
GBP/USD 1.33569
0.085%
GBP/JPY 216.803
-0.005%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
Euro Stoxx 50 futures fell 0.35%, German DAX futures fell 0.35%, and UK FTSE futures fell 0.28%.1. Sudden Geopolitical Military Conflict: Serious clashes erupted in the Strait of Hormuz and surrounding waters. According to CCTV and other media reports, two UAE oil tankers were attacked by Iranian cruise missiles in the southern channel of the strait (resulting in one death and eight injuries); the Iranian Revolutionary Guard announced the attack and destruction of two foreign oil tankers that ignored warnings. Simultaneously, the US Central Command announced it would reinstate the blockade of maritime traffic to and from Iranian ports at 4:00 AM Beijing time on July 15th. 2. Macroeconomic Policy and Concerns about Soaring Transportation Costs: Trump stated he would impose a 20% protection fee on all goods transported through the Strait of Hormuz. Rico Luman, senior economist at ING, estimated this could increase the cost of transporting oil through the strait by another $16 per barrel (to $26), potentially increasing the overall cost of a large oil tanker by over $30 million. 3. Weakening Spot Prices: The spot market is entering a downward trend, shifting from a period of high demand to a lower price. The latest SCFIS European line is 3656.38 points, slightly lower than expected. According to Haitong Futures statistics, the market average for Late July is approximately $5130 USD for a container load (TCL). It is expected that the OA and PA alliances still have room to follow Maersks $4800 USD adjustment for 30-week TCL openings, and the average could potentially fall below $5000 USD. 4. Haitong Futures view: The EC main contract is currently betting on the actual downward slope after freight rates peak. The previously anticipated low capacity in the 31-week period might have altered the current linear extrapolation of the downward freight rate path, but the current adjustment after the empty schedule has smoothed the decline. The 08 contract valuation has already largely priced in the subsequent decline; observe whether there is a possibility of a gradual decline. There is a lack of significant marginal improvement drivers in the short term. 5. Guangfa Futures view: Geopolitical disturbances have resurfaced, and short-term downward momentum is nearing exhaustion. For longer-term contracts, the expectation of the resumption of Red Sea shipping, coupled with the uncertainty of the US-Iran conflict, results in greater volatility, but there is currently no clear trend. (The above content is compiled from publicly available market information from Haitong Futures, Guotou Futures, etc., and is for reference only. It does not constitute investment advice.)BP: Expects natural gas and low-carbon energy production to be 750,000 to 770,000 barrels of oil equivalent per day in the second quarter of 2026.BP: Expects oil and gas production and operations to be between 1.42 million and 1.45 million barrels of oil equivalent per day in the second quarter of 2026.BP: Upstream production is expected to be between 2.17 million and 2.22 million barrels of oil equivalent per day in the second quarter.

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.


Suggestion