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August 6th - It is reported that several major cities are planning to introduce measures to boost housing consumption. Chengdu is focusing on optimizing supply, increasing demand, reducing inventory, and stabilizing expectations in its housing sales policies. These include optimizing supply to promote a balance between supply and demand and supporting housing consumption to meet diverse needs. Currently, these policies are under internal review and will be released publicly as soon as they are finalized. Hefei is working with relevant departments to coordinate and study a collaborative action plan to promote "large-scale consumption," in line with national policy guidance. Wuhan is actively preparing policy research and plans to improve its policy toolbox in the second half of the year, focusing on linking the primary and secondary housing markets, reducing commercial and office space inventory, and supplying high-quality housing. Nanjing will optimize relevant policies and measures in a timely manner based on market realities, increase the supply of diversified "good houses," and further promote activities such as "trade-in" for housing consumption to effectively release various rigid and improved housing demands from residents. Additionally, major cities such as Hangzhou, Qingdao, Chongqing, and Jinan have also indicated that they will continue to prepare and dynamically optimize policies to stabilize the real estate market.On August 6th, Federal Reserve Chair Mary Daly stated that she "fully supports" the Feds decision last week to keep interest rates unchanged. She said that with inflation significantly above the 2% target, the Fed needs to gather more data to determine what policy measures to take in the future. Daly indicated that the Fed "still has a lot of information to gather" before the September monetary policy meeting to determine whether current inflation is driven by supply shocks that will subside over time or is forming a more persistent inflationary environment. Daly stated that the Fed should "closely monitor the incoming information while being fully prepared to act if necessary." Daly is not currently a voting member of the FOMC. In her remarks, she expressed concern about how the public would react to a new round of inflation, noting that if inflation momentum strengthens again, the Fed may need to take aggressive measures to bring price pressures back to the target level.August 6th - The first mandatory national standard for cosmetics, "General Requirements for Cosmetic Safety," drafted by the National Medical Products Administration, was released today and will officially take effect in 2028. The "Cosmetic Hygiene Standard" issued in 1987 will be simultaneously repealed. An Fudong, head of the drafting group for the national standard "General Requirements for Cosmetic Safety," explained that based on differences in risk related to exposure routes, user groups, and application sites, the new national standard imposes stricter standards on childrens cosmetics and cosmetics used around the eyes, eyelashes, and lips.Hong Kong stocks opened lower and continued to decline, with the Hang Seng Index falling by more than 2% and the Hang Seng Tech Index falling by 1.7%.Shanghai Auntie (02589.HK) shares in Hong Kong rose more than 9%, with a trading volume of over 690,000 lots.

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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