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Market news: Local authorities said that drone debris crashed at night in an area of an oil depot in Russias Krasnodar Krai, causing a fire that has been extinguished.April 11th - According to foreign media reports, British Prime Minister Keir Starmer has decided to increase UK defense spending at a faster pace than currently planned in an effort to counter potential leadership challenges. The UKs defense spending has fallen behind allies such as Germany, and the government had previously set a target of increasing core defense spending to 3.5% of economic output by 2035. The decision to increase defense spending is essentially finalized, but specific details are still pending. The UK Treasury insists that any significant increase in defense spending must be achieved through tax increases or spending cuts.On April 11, the Japanese government approved an additional subsidy of 631.5 billion yen (approximately US$4 billion) to accelerate Rapiduss entry into the highly competitive field of artificial intelligence chip manufacturing. This funding aims to support Rapiduss business operations for IT company Fujitsu. The Ministry of Economy, Trade and Industry stated on Saturday that the additional funding brings the total amount of government funding and investment in the startup to 2.6 trillion yen (approximately US$16.3 billion) in the current fiscal year (ending March 2027). The ministry said an external committee has inspected Rapiduss wafer fab in northern Hokkaido and approved its technological progress. The newly established chipmaker began developing wafers using 2-nanometer technology last year, aiming to mass-produce cutting-edge semiconductors by 2027 and help Japan reduce its reliance on industry leader TSMC.April 11th - A Bank of America research report indicates that the Eurozone is far more sensitive to oil prices than the United States. The study found that a 10% shock to oil prices would have an inflationary impact of approximately 40 basis points and a corresponding growth impact of over 10 basis points. Both of these effects are roughly twice that in the United States. We believe this result is due to the higher proportion of energy in Europes consumption basket and the regions status as a net importer of oil.On April 11th, Baidu AI Cloud, in collaboration with embodied intelligence companies such as ZeroPower, LingSheng Technology, Fourier, Weite Technology, Topway Intelligence, Shutu Technology, and Songying Technology, launched the Baidu AI Cloud Embedded Intelligence Data Supermarket (Beta Version). This pioneering hierarchical and scalable data tagging system accelerates the large-scale deployment of embodied intelligence. Currently, Baidu AI Cloud provides services to over 30 embodied intelligence companies, including Zhiyuan and Unitree.

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.


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