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On July 20th, the Ministry of Commerce held a national teleconference on July 17th to advance the mid-year work of the consumer goods trade-in program. The meeting summarized the progress and achievements of the policy implementation in the first half of the year and deployed key tasks for the next stage. The meeting emphasized that all regions and relevant departments should further enhance their political awareness, establish and practice a correct view of performance, and implement the consumer goods trade-in policy meticulously and effectively with a persistent and dedicated approach. They should further intensify their efforts, strengthen inter-departmental coordination, widely publicize the policy, and expand its coverage. They should also continuously enrich offline consumption scenarios, optimize the subsidy review and disbursement process, facilitate public participation in and enjoyment of the policy, and enhance the publics sense of gain.Citigroup lowered its price target for IBM (IBM.N) from $375 to $255.Citigroup raised its price target for JPMorgan Chase (JPM.N) from $325 to $360.Preliminary plans indicate that Angola will load 34 tankers of crude oil in September, compared to 35 tankers planned for August.On July 20th, Citigroup strategists stated that the widely discussed "Big Seven" tech concept is "no longer applicable" in assessing investment opportunities in the US AI sector. The strategy team, led by Scott Chronert, suggested that investors should turn their attention to a broader range of stocks that have consistently been major drivers of earnings growth and share price increases for the S&P 500. They recommended focusing on the so-called "growth cluster," a group that includes not only large-cap tech stocks but also most companies benefiting from AI infrastructure development. Chronert stated that this group accounts for more than half of the S&P 500s total market capitalization and contributes nearly 48% of earnings. After driving the S&P 500 to record highs in recent years, the "Big Seven" tech index is projected to underperform the market by 2026 as investors favor sectors expected to benefit from massive AI capital expenditures.

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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