- Oil prices slide on trilateral US, Russia, Ukraine talks
- US CPI expected to tick lower.
- US dollar is trading steady but with a bid in early NY markets
USDCAD open (6:00 am): 1.4126, overnight range 1.4105-1.4141, close 1.4120, WTI $85.58, Gold $4,075.76.
The Canadian dollar is trading quietly but with a negative bias ahead of todays US inflation data. The Loonie continues to suffer the fallout from the divergent Canada and US employment reports that were released Friday.
The yuan has landed in Canada. China sold a 4-billion yuan-denominated green sovereign bond (CAD $844.7) here, carved into three- and five-year tranches priced at 1.40% and 1.50%. Demand ran to almost 15 times the offering, and it is China’s first offshore yuan sovereign deal anywhere other than Hong Kong, Macau and London.
WTI is bouncing around a $83.89-$86.92 range as the war premium built up over the US-Iran and Russia-Ukraine conflicts starts to leak out. Risk appetite perked up once Trump talked down the chances of new strikes on Iran and the Qatar- and Pakistan-brokered talks gained traction. The three-way US, Russia and Ukraine negotiations are also feeding hopes of an end to that war, though European capitals are nervous about what Trump might hand Putin to get a ceasefire over the line.
Traders paid attention to Fed Governor Christopher Waller comments this morning. He warned that a hotter-than-expected inflation print today would have him pushing for a 50 bp hike in December. If the consensus is right, he may be worrying over nothing. October CPI is forecast at 0.3% m/m, half of September’s 0.6%, with core seen at 0.2% m/m after 0.3% previously.
Asian equities finished higher. Japan’s Topix closed up 1.98%, Australia’s ASX 200 gained 1.10% and Hong Kong’s Hang Seng tacked on 0.44%.
At 7:15 am, in Europe, the German DAX is up 1.23%, the French CAC 40 has gained 1.13% and the UK FTSE 100 is p 0.44%. S&P 500 futures are unchanged, the DXY is 101.74 and the US 10-year yield is 4.892%.
EURUSD slipped back within a 1.1216-1.1252 band, giving up its European high and hovering just off the session low as New York gets going. The trilateral Russia, US and Ukraine talks are on the radar, but for now traders care more about US inflation, and Waller’s comments only sharpened that focus.
GBPUSD has wandered through a 1.3346-1.3459 range with no particular destination as traders wait on US CPI and mostly tune out the geopolitics. Sterling found a little support after BoE policymaker Clare Lombardelli said this morning, she would not rule out another December hike, and softer oil prices are also lending a hand.
USDJPY is pressing against the top of a tight 157.86-158.17 overnight band after Waller’s hawkish turn. The Bank of Japan’s summary of opinions showed several members flagging a strong chance of a December hike, but no one cared. The unwinding of safe-haven positions is giving USDJPY an extra lift.
AUDUSD stayed on the back foot in a narrow 0.6909-0.6930 sliver, squeezed by Waller’s remarks and soft domestic data. NAB business conditions dropped to -2, the weakest reading since August 2020, and confidence sagged to -15, which strengthens the case for the RBA holding rates in December.
Nothing of note on the Canadian data calendar today.
