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May 1st - In pre-market trading, SanDisk (SNDK.O) fell about 5%, and Western Digital (WDC.O) fell about 7%. Both companies provided guidance that significantly exceeded expectations, but analysts pointed out that the strong results had already been fully priced in, and the guidance "lacked sufficient surprises." Apple (AAPL.O) rose about 3%, with revenue in China continuing to grow by double digits last quarter, and iPhone revenue hitting a record high for the same period. Its revenue guidance for this quarter was unexpectedly strong.May 1st, Futures News – According to foreign media reports, disruptions to global energy flows have accelerated the shift to biofuels, prompting governments and producers worldwide to speed up blending, production, and trade. Brazil, the worlds second-largest ethanol producer, has announced plans to raise the cap on the proportion of ethanol-blended biofuels in gasoline from the current 30% to 32%, aiming to curb rising domestic gasoline prices due to war and control inflation. The Brazilian government stated that this measure could allow the South American nation to stop importing gasoline. Indonesia, the worlds largest palm oil producer, is accelerating the rollout of B50 – one of the worlds most ambitious biofuel blending directives – as part of a nationwide effort to achieve food and fuel self-sufficiency. Neighboring Malaysia, the worlds second-largest palm oil producer, plans to gradually increase the proportion of palm oil-based fuels in diesel from 10% to 20%. In the United States, the war with Iran has become a topic used by biofuel proponents to push the government to allow year-round nationwide sales of high-ethanol gasoline. They argue that increasing sales of this corn-based fuel makes sense, as ethanol is currently cheaper than gasoline, thus alleviating the cost burden on consumers.XPeng Motors (XPEV.N) delivered 31,011 vehicles in April, a 13% increase month-on-month.ECB Governing Council member Nagel: The ECB is aware of price risks and is ready to act; the current situation is not as optimistic as the baseline in March.May 1 (Reuters) - Ukrainian Ambassador to Japan Yuri Lutov stated that Japans easing of arms export restrictions creates an opportunity for future dialogue between the two countries regarding Japanese military equipment exports to Ukraine. In an interview with the media at the Ukrainian Embassy in Japan, Lutov said that the "Indo-Pacific region is inseparable from the European continent" and that "if Ukraine falls," it will have a "domino effect." He added that Japans move provides an "opportunity for dialogue," and Ukraine could receive funding from Japan to develop air defense systems, thereby reducing its dependence on US-made Patriot missiles.

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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