- Large USDCAD option expiries and Retail Sales ahead.
- Eurozone PMI’s weaker than expected.
- US dollar consolidating recent gains in subdued overnight session.
USDCAD: 1.3676, overnight range 1.3670-1.3708, close 1.3694, WTI $81.05, Gold, $2325.18
The Canadian dollar crawled higher overnight, which was a quiet start to what should be a busy week. The Bank of Canada Governor kicks things off in Winnipeg today with a speech titled “Workers, jobs, growth and inflation—Today and tomorrow.” The title suggests that he is feeling rather pleased with the latest inflation results and may provide fresh insight into the timing of the next interest rate cut.
Canadian inflation data is released Tuesday, followed by April GDP. The impact of the results may be fleeting depending upon how Friday’s US PCE Price Index data is received. Fed Chair Jerome Powell often cites the latest PCE-Price Index results to justify Fed action or inaction.
WTI oil prices consolidated last week’s gains in an 80.23-81.16 range. The session low occurred after Iran reduced its price for crude for Asian customers by fifty cents from its June level. The news was overshadowed by increased attacks on Red Sea shipping by Houthi rebels in Yemen.
Asian equity indexes closed mixed. Australia’s ASX 200 lost 0.80% while Japan’s Nikkei 225 index rose 0.54%. The sharply lower yen was behind the Nikkei gains. European bourses are higher, led by a 0.80% rise in the French CAC index, while S&P 500 futures are flat. The 10-year Treasury yield is a couple of ticks higher at 4.27%.
EURUSD traded in a 1.0684-1.0736 range even after the German Ifo report was weaker than expected, which, according to Ifo, means the German economy is struggling to overcome stagnation.
GBPUSD is at the top of its 1.2632-1.2672 range. Further gains may be a struggle due to last week’s dovish Bank of England outlook and the prospect of an August rate cut.
USDJPY is very choppy in a 158.81-159.93 range in early NY trading. The BoJ released its Summary of Opinions, which didn’t provide any insight. Senior government officials unleashed more verbal intervention, but it fell on deaf ears.
AUDUSD traded in a 0.6626 to 0.6657 range due to broad-based US dollar weakness. Traders are also awaiting Wednesday’s Australian inflation data.
The US and Canadian economic calendars are empty.
