- Equity markets attempting to rebound
- US JOLTS job openings report due.
- US dollar opens mixed—CAD underperforms
USDCAD open 1.3797, overnight range 1.3778-1.3808, close, 1.3784, WTI 64.44, Gold 3534.83
The Canadian dollar remains under pressure due to narrowing CAD/US 10-year yield spreads, softer oil prices and caution ahead of upcoming US employment reports. Yesterday’s S&P Global PMI, at 48.3 meant underscored Canada’s struggling economy.
WTI dropped from 65.73 to 64.04 before bouncing to 64.30 in NY. The dropped is due to reports that Opec is planning to announce another increase in production at the September 8 meeting.
Markets are jittery ahead of Friday’s nonfarm payrolls. The usual noise around rising bond yields, Trump’s tariff drama, and Lisa Cook’s so-called “firing” is on the backburner as NFP takes center stage. If job revisions undershoot and payrolls plus wages beat expectations, Powell’s pivot will look justified. But if the data collapses, bets on a 50 bp rate cut will surge.
Asian equities mirrored Wall Street weakness. Australia’s ASX 200 dropped 1.82% after data dimmed hopes for an RBA cut, Japan’s TOPIX lost 1.07%, and Hong Kong’s Hang Seng slid 0.60%. By 7:10 am EDT, the DAX was off 1.53%, the CAC 40 eased 0.19%, and the FTSE 100 dipped 0.46%. S&P 500 futures were down 0.71%, while the US Dollar Index sat at 98.36.
EURUSD traded in a 1.1609-1.1665 band, consolidating recent losses. Eurozone PMI releases were a shade softer but stayed above the 50 expansion line. July producer prices rose 0.4% m/m, half of June’s pace. Traders remain uneasy about French politics and Paris’s resistance to the proposed EU-Mercosur pact.
GBPUSD climbed from 1.3333 to 1.3418 overnight. A pullback in the 30-year Gilt after hitting levels last seen in 1998 provided support, as did relief that Chancellor Reeves won’t present the Autumn budget until November 4. A stronger UK Services PMI at 54.2 versus 53.6 in July helped sentiment, with S&P Global noting that business expectations hit a ten-month high.
USDJPY swung inside a 133.33-134.18 corridor, leaning higher on firmer US Treasury yields and political uncertainty in Tokyo. Traders are also wary ahead of trade talks in the US later this week.
AUDUSD rebounded from Monday’s losses, moving from 0.6502 to 0.6534. Gains were fueled by resilient data: Services PMI ticked up to 55.8 from 55.1, while Q2 GDP surprised at 1.8% against forecasts for 1.6%. That lessens the odds of an RBA rate cut on September 30.
Today’s US data includes JOLTS job openings and Factory orders for July.
