The Morning Update

The USD strengthens, oil prices hold steady, equity markets fall, and US yields rise as the risk of a tone shift grows ahead of the key US jobs report. The USD strengthens on safe-haven demand as a global sell-off in AI stocks drives investors into cash amid growing risk aversion. Attention now turns to today's US non-farm payrolls report for clues on the Fed's rate outlook. Global equity markets are broadly lower, with Asian and European shares extending losses as concerns around tighter U.S. data-centre regulation continue to weigh on technology and semiconductor stocks. The outlier is Nasdaq futures, which have turned positive as dip buyers return to some of the hardest-hit AI names ahead of today’s U.S. payrolls report. Elsewhere, oil and Bitcoin are broadly steady, while gold prices fall as Treasury yields stabilize and the U.S. dollar firms ahead of today’s key payrolls report. Today’s economic calendar focuses on U.S. Nonfarm Payrolls, Unemployment Rate and Average Hourly Earnings, Canadian Employment Change and Unemployment Rate, followed by Canadian Ivey PMI and preliminary U.S. University of Michigan Consumer Sentiment and Inflation Expectations, alongside speeches from the Fed’s Williams and Bowman and the ECB’s Lane.

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News Headlines. Wall Street set to steady after tech rout. Nearly 600,000 join latest protests in France. Iran celebrates Trump's election defeat as mediators push to deal to end war. Oil prices set for sharp weekly fall after midterm elections as investors weigh Iran conflict risk. Democrats planning flood of AI bills when they take control of Congress. Wave of bomb threats afflict European flights for third time this week. North Korea's army of world-class hackers is secret weapon that took down Binance. China's yuan dilemma: too weak abroad and too strong at home. TSX futures slip as tech jitters linger ahead of employment data. Bank of Canada keeps 2% inflation target. Carney government unveils $142B plan to boost economy, affordability in Budget 2026.

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In currency markets. Against the USD, the Norwegian krone, Australian dollar and New Zealand dollar weakened as a sharp sell-off in global technology stocks triggered risk aversion and renewed demand for safe-haven currencies. The AUD came under particular pressure from the equity rout and falling energy prices, while the NZD was further weighed down by disappointing employment data and reduced expectations of a December RBNZ rate hike; the NOK also faced pressure from the recent decline in oil prices.

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In commodity markets. WTI +0.48% | Nat Gas +1.87% | Gold -0.75% | Silver -0.58% | Copper -0.30% | Palladium -1.84% | Coffee +0.09% | Cocoa -1.46% | Soybeans -0.02% | Wheat -1.29%

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CAD retreats in early trading as softer oil prices and caution ahead of today’s Canadian and U.S. employment reports weigh on the loonie. Investors are also digesting Ottawa’s federal budget, with the fiscal outlook likely to influence expectations for domestic growth and future BoC policy, while markets continue to assess whether the U.S. midterm result will lead to a less confrontational approach to Canada-U.S. trade. The BoC’s recent rate hike and guidance that further tightening may still be required are providing some underlying support, but a weak Canadian jobs report or stronger U.S. payrolls could extend the early pullback.

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EURCAD eases slightly in early trading as CAD finds some support ahead of today’s Canadian employment report, while the euro pauses after its recent run higher. The cross has gained through much of the week, but with both the BoC and ECB maintaining relatively firm policy biases, near-term direction is increasingly dependent on today’s Canadian jobs data and Eurozone retail sales.

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EUR weakens in early trading, giving back part of this week’s gains as investors rotate back toward the USD ahead of today’s U.S. payrolls report. The euro has struggled to benefit from the recent selloff in U.S. technology stocks, while ECB Chief Economist Philip Lane kept December policy firmly data-dependent despite warning that higher energy costs could feed into wages and broader prices. Softer German and Eurozone data are also limiting support, although expectations for another ECB hike in December remain intact.

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GBPEUR is broadly flat as both currencies consolidate after this week’s central-bank moves. GBP remains supported after the BoE raised rates to 4.0%, while the euro is underpinned by expectations that the ECB could tighten again in December; softer UK house-price data and a modest pullback in European momentum are keeping the cross contained.

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GBP retreats against the USD, extending its pullback from this week’s near eight-week highs as the greenback firms ahead of today’s U.S. payrolls report. The BoE’s 25bp hike to 4.0% provides some underlying support, but Governor Bailey’s warning that investors should not assume a rapid sequence of further hikes has tempered the post-meeting boost. Stronger recent U.S. labour indicators have also raised the risk of a firmer payrolls print, leaving GBP/USD vulnerable if expectations for another Fed hike in December increase.