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The Swiss National Bank reported an annual profit of CHF 26.1 billion, with its gold holdings recording a valuation gain of CHF 36.3 billion.On March 2nd, Citigroup reported that Xiaomi (01810.HK) will announce its fourth-quarter results on March 24th, which are expected to fall short of market expectations due to lower-than-expected sales and gross margins, higher operating expenses, and lower revenue. The bank expects Xiaomis adjusted net profit to fall 35% year-on-year to RMB 5.4 billion, lower than the RMB 6 billion to 7 billion expected by institutional investors and also lower than its previous estimate of RMB 7.4 billion, based on lower gross margins in smartphones and electric vehicles, higher operating expenses, and lower non-operating income. Citigroup lowered its earnings per share forecasts for Xiaomi from last year to 2027 by 5% to 7%, and reduced its target price from HKD 43 to HKD 42, using a comprehensive valuation approach to reflect lower smartphone and IoT revenue, lower electric vehicle gross margins, and lower non-operating income.Ericsson and Intel have joined forces to accelerate the path to commercialization of native AI 6G technology.Hong Kong Chief Executive John Lee will travel to Beijing tomorrow (March 3) to attend the opening session of the Fourth Session of the 14th National Peoples Congress, which will be held on March 5. Lee will return to Hong Kong on March 5. During his absence, Chief Secretary for Administration Chan Kwok-ki will act as Chief Executive.The yield on Japans 40-year government bonds fell 3.0 basis points to 3.530%.

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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