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The main fuel oil futures contract rose by more than 5%, currently trading at 3,685 yuan per ton.The chart shows that at 22:00 Beijing time on August 11, there will be large foreign exchange options contracts for Euros, Japanese Yen, etc., expiring. There are 3 large contracts with strike prices of over 1 billion. Please manage your risks.On August 11, the Zaporizhia Regional Military Administration of Ukraine reported that Russia launched a large-scale combined attack on Zaporizhia using missiles and guided-missile bombs in the early hours of the day, resulting in 6 deaths and 19 injuries. The attack damaged four residential buildings and non-residential structures. All the injured have received medical attention. The Russian Ministry of Defense also reported on August 11 that Russian forces used land-based high-precision weapons to strike military industrial enterprises and logistics centers in Kyiv and Zaporizhia in the early hours of the day.Aluminum prices rose for the seventh consecutive day on August 11th as the prospect of a swift agreement to reopen the Strait of Hormuz faded, exacerbating market concerns that Middle Eastern supplies would remain constrained for the foreseeable future. The increasingly hardline stances of both the US and Iran mean a protracted tug-of-war to reach an agreement has dampened hopes for normalizing aluminum supplies, while global inventories are hovering near multi-decade lows. The Middle East accounted for about one-tenth of global production before the war. Aluminum prices surged at the beginning of the war before retreating as the US and Iran entered into negotiations. Prices have since resumed their upward trend, rising more than 8% since the end of June, driven by the continued delays in negotiations to end the war and investors reducing their bets on US interest rate hikes, fueling a broader rally in base metals.The local governor said that an industrial enterprise in Russias Orenburg region caught fire after being attacked by an "enemy drone".

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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