- FOMC minutes due this afternoon
- Oil prices consolidating but with a bit of a bid
- US dollar opens higher as Treasury yields climb
USDCAD open (6:00 am): 1.4227 overnight range 1.4206-1.4233, close 1.4209, WTI $90.00, Gold $4,118.75.
The Canadian dollar is boxed into a tight range, though sellers have shown a modest appetite in early NY trading. With no actionable top-tier data on the docket and the FOMC minutes not due until 2:00 pm, traders are content to keep their powder dry.
Yesterday's trade data offered the loonie only a brief lift, since the surplus owed more to exporters rushing orders out the door ahead of the next round of Trump tariffs than to any genuine strength. Meanwhile, Trump's trade war, along with his latest remark that he is in no rush to resume talks with Canada, continues to put a lid on any loonie gains
The September FOMC minutes arrive well past their sell-by date. Since the September 16 meeting, a pile of economic data and a parade of Fed policymakers have taken a knife to October rate hike bets. After softer personal consumption expenditure and jobs numbers, the CME FedWatch tool now prices a 21.6% chance of an October hike, a far cry from the roughly 51% odds of a week ago.
The Fed speakers were singing from the same hymn sheet. New York Fed President John Williams counselled patience, Vice Chair Philip Jefferson wants more data before committing, and Governor Michelle Bowman hinted that rates could stay put through 2026.
Asian equity markets finished in the red, with Japan's Topix down 0.70% and Hong Kong's Hang Seng off 0.62%, while Australia's ASX 200 went nowhere.
As of 7:30 am, Germany's DAX has shed 1.41%, the French CAC 40 is 1.13% lower and the UK FTSE 100 has given up 0.74%. S&P 500 futures are off 0.36%, the US 10-year yield sits at 5.34%, and the DXY is 102.33.
EURUSD retreated in a 1.1179-1.1263 range, handing back every pip of Tuesday's French relief rally. A firmer US dollar did some of the damage, but the political and fiscal theatrics in Paris did the rest. France plans to sell a record €340 billion ($381 billion) of bonds in 2027 to keep the government funded and roll over its pandemic-era debt, hardly a confidence booster for the single currency.
GBPUSD slipped through a 1.3224-1.3277 band overnight and opened the NY session at its low, although it is still corralled inside the 1.3180-1.3310 range that has held since September 30. What little support the pound enjoys comes from 88% odds of a 25 bps BoE hike on November 5.
USDJPY churned in a 157.85-158.51 range during a choppy session. Just before London opened for business, prices plunged to the session low at speed and for no obvious reason, only to recoup most of the losses in early NY trading. Meanwhile, BoJ board member Ayano Sato, one of two dissenters who voted against a hike at the September 18 meeting, has turned hawkish, backing a gradual path of rate increases.
AUDUSD drifted sideways in a narrow 0.6964-0.6985 range, pinned between a firm greenback and fading odds of a follow-up RBA rate hike. Nor will the calendar offer much rescue, with tonight's consumer inflation expectations survey the most thrilling event on the docket.
