- Bank of England leaves rates on hold.
- Challenger Job cuts soar to 153,074
- US dollar gives back some gains.
USDCAD open: 1.4097, overnight range 1.4090-1.4113, close, 1.4108, WTI 60.16, Gold 4008.20
The Canadian dollar clawed back some gains yesterday and again overnight after US data appeared to downgrade the odds for a December rate cut. Traders ignored BoC Governor Tiff Macklem’s testimony to the House Finance Committee because he basically repeated the monetary policy statement.
WTI oil prices are drifting around the 60.00/barrel area due to oversupply concerns.
The Challenger Job Cut report showed layoffs soaring to the highest level for October since 2002, on cost-cutting and AI (actual 153,074, previous 54,006). The challenger economist wrote “Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes. Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market.”
The greenback fell broadly on Wednesday, even after stronger-than-expected US economic data. ADP reported 42,000 new jobs in October, beating forecasts of 25,000, while the ISM Services PMI jumped to 52.4 from 50, an eight-month high. The results slightly reduced the odds of a December rate cut but did little to alter the bearish tone for the dollar.
Asian equity markets extended Wall Street’s gains overnight. Hong Kong’s Hang Seng index jumped 2.12%, Japan’s TOPIX rose 1.38%, and Australia’s ASX 200 slipped 0.13%.
As of 7:30 a.m., European stocks were mixed, with the CAC-40 down 0.68%, Germany’s DAX off 0.32%, and the FTSE 100 lower by 0.19%. S&P 500 futures were up 0.16%, the US Dollar Index hovered at 99.94, and the 10-year Treasury yield was 4.139%.
EURUSD traded in a 1.1490–1.1524 range, supported by German industrial production data showing a 1.3% m/m gain in September after a sharp 3.7% decline in August. ECB Vice President Luis de Guindos reiterated that rates are appropriately set and that any short-term dip in inflation below 2% will not alter policy direction.
GBPUSD traded in a 1.3045–1.3095 range, with gains following the Bank of England’s decision to keep rates steady at 4.0% in a narrow 5–4 vote. Governor Andrew Bailey and several policymakers voted to hold, citing persistent inflation pressures even as the Bank acknowledged that CPI inflation has peaked.
USDJPY drifted between 153.53 and 154.14 as dollar weakness offset the support from steady Treasury yields. Japan’s Services PMI for October printed at 53.1 versus 52.4 expected but had little market impact. Investors are watching for details of Tokyo’s fiscal stimulus plan expected before month-end.
AUDUSD traded uneventfully in a 0.6498–0.6519 band, supported by the Reserve Bank of Australia’s decision to leave rates unchanged and by widespread US-dollar selling after the upbeat US data. Australia’s trade surplus widened to AUD 3.938 billion from AUD 1.11 billion, adding mild tailwinds to the currency.
