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May 3 - A draft OPEC+ statement indicates that seven OPEC+ countries have agreed to raise their June oil production target by approximately 188,000 barrels per day, marking the third consecutive month of increases. This move aims to demonstrate the organizations readiness to increase supply after the war. Sources say that despite the UAEs withdrawal from the organization this week, OPEC+ will continue to pursue its production increase plan. The seven member countries meeting on Sunday are Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman. A report from OPEC last month stated that the average daily crude oil production of all OPEC+ members in March was 35.06 million barrels, a decrease of 7.7 million barrels per day from February, with Iraq and Saudi Arabia experiencing the largest production cuts due to export restrictions. The draft statement indicates that the seven member countries will meet again on June 7.The draft statement indicates that OPEC+ plans to increase its oil production target by 188,000 barrels per day starting in June.On May 3rd, rumors circulated online that "starting May 1st, ETC will no longer be used on highways; passengers can enter without a card simply by showing their license plate." This rumor sparked heated discussion online, with some netizens even considering removing their ETC devices from their cars. However, after verification with multiple sources, reporters confirmed that no such "new regulation" has been issued by relevant departments. Industry experts stated that these rumors represent a one-sided and inaccurate interpretation of the "mobile phone+" cardless passage technology and constitute exaggerated advertising.British Prime Minister Starmer: We will work together to build a stronger Britain.On May 3, it was reported that in the first quarter of this year, the China Development Bank (CDB), based on its institutional characteristics, coordinated special resources and carried out extensive cooperation with other banks, issuing a total of RMB 28.54 billion in special relending loans to stabilize foreign trade, supporting more than 6,500 small and micro foreign trade enterprises. The weighted average interest rate of the borrowers was lower than the national average interest rate for newly issued inclusive small and micro loans during the same period, effectively helping relevant enterprises alleviate financing difficulties and high financing costs, stabilize orders, expand markets, and stabilize employment.

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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