- US NFP not expected to cause any drama
- Oil prices slide as US-Iran talks progress slowly
- US dollar opens with losses across the board.
USDCAD open: 1.4196, overnight range 1.4186-1.4225, close 1.4219, WTI 67.51, Gold 4,064.90
The Canadian dollar paid no attention whatsoever to Washington's decision to walk away from extending the CUSMA trade pact. Ottawa feels no urgency to hammer out a fresh accord with the current administration, mainly because words like "deal," "contract," and "obligation" are meaningless to Trump.
The Canadian dollar remains pressured by the sizeable yield gaps between Canada and the US, even though those gaps closed a little through the overnight session.
Crude has slid back to where it sat before the Iran/US conflict, with WTI easing from 70.20 on Friday to 67.29 this morning. Over the last 24 hours, thirty-four vessels have transited the Strait of Hormuz as nations scramble to top up drained oil inventories ahead of Trump's next strike on Iran.
US financial markets are closed Friday, for Saturday’s July 4th Independence Day holiday. As a result, the calendar has been shuffled forward, with Friday's usual data batch now arriving early, headlined by the closely watched nonfarm payrolls report.
The consensus points to 110,000 jobs added, down from the prior 172,000, with the jobless rate holding steady at 4.3%. Weekly jobless claims are pencilled in at a forgettable 220,000. A 53% collapse in Challenger layoffs, together with Monday's JOLTS numbers, paints a picture of an economy where firms are neither hiring aggressively nor letting people go, a low-fire, steady-demand equilibrium. Should payrolls land on forecast, the Fed has every reason to sit on its hands.
Risk appetite firmed up a touch. Qatar-hosted talks between Washington and Tehran's intermediaries wrapped up on what Trump billed as a positive not. In Sintra, Portugal, Fed Chair Kevin Warsh turned up at the ECB Forum but offered nothing on the direction of US rates.
Equity markets in Asia finished the session mixed and directionless. Hong Kong's Hang Seng added 0.76%, while Australia's ASX 200 and Japan's Topix went nowhere.
By 7:40 am, Europe had opened firmly higher. Germany's Dax was ahead 0.99%, France's CAC 40 had tacked on 0.88%, and Britain's FTSE 100 was up 0.43%. S&P 500 futures sat unchanged, the 10-year Treasury yield was 4.491%, the DXY stood at 101.04, and gold (XAUUSD) traded at 4,070.74.
EURUSD changed hands between 1.1375 and 1.1422, recovering the ground it lost a day earlier and pressing up toward both its overnight ceiling and the previous session's high. Unemployment across the bloc held at 6.2% in May. Inflation, meanwhile, undershot forecasts, with the Harmonized Index of Consumer Prices and its core counterpart climbing 2.8% and 2.4% respectively.
GBPUSD, which rose from 1.3266 to 1.3363, after Prime Minister-to-be Andy Burnham persuaded markets, at least partway, that he was no reckless tax-and-spend operator bent on redistribution, pledging instead to honour "strict fiscal discipline and adhere to the UK's current borrowing and spending limits."
USDJPY dropped to 161.05 from 162.60 after traders after the BoJ was rumoured to be intervening. The payoff was modest, though that calculus could shift tomorrow with the US shut for the holiday.
AUDUSD held a narrow 0.6884 to 0.6912 range, caught between recent underwhelming data on one side and a lift in risk sentiment on the other, the latter fed by retreating oil prices and "progress" in the Iran-US peace track.
