The Morning Update

Monday May 13th , 2024

Written by:
Bernard Gauvin

The USD starts the week slightly lower; equity and oil prices hedges higher while treasury yields are lower. Contrary to last week where there was little in the form of data being released, this week we area waiting the US PPI (Tuesday) and CPI (Wednesday).


In other news.  Secretary of State Blinken delivered some of the strongest public criticism of Israel’s action inGaza, saying that the tactics have meant a ‘horrible loss of life of innocent civilians”. Despite these comments, Israeli forces pushed deep Gaza's northern edge to recapture an area where they had claimed to have defeated Hamas months ago. Putin replaces his defense minister with a civilian as he starts his 5th term in office. Gazprom loss shows struggle to fill EU gas sales gap with China. Ukraine’s drone attacks damaged Russian’s oil depot and power station. After, withdrawing troops in the Philippines in the 1990’s, the US Armed forces are set to open new bases to counter China’s threat in the South China Sea.


In currency news. The MXN edges higher (0.08%) as interest rates in Mexico are expected to remain elevated. The AUD extended its losses, possibly due to the RBA's less hawkish stance after it decided to keep its interest rate unchanged at 4.35%. The USD gained 0.12% against the CNY, 0.18% against the NZD and 0.02% against the AUD. The ZAR appreciated 0.47% against the US as we start the last trading day of the week.


In commodity markets. Oil prices starts the week lower amid signs of weaken fuel demand. Gold fell (0.87%) after US Consumer Sentiment data shows a sharp decline in optimism and higher inflation expectations. Silver prices retraced 0.14% but remains 10% higher than where we started 2024. Copper prices are up 1%. Wheat and soybean prices are down 1.0% and 0.3% respectively as we start the week.


Current level USD Index               105.248           Down 0.05%


The USD/CAD recovers some of the lost ground in early trading sessions as we await today’s Fed Speeches and Inflation figures Tuesday and Wednesday.


Current level USD/CAD               1.3676            Up 0.07%


The EUR/CAD bounced of Friday’s lows hovering near the 2024 highs.


Current level EUR/CAD                1.4748           Up 0.15%

EUR/USD moves higher above as theappeal for risky assets improves. Expectation is that the ECB will start cutting rates in June. US inflation data will give the market some fresh guidanceas to the Fed’s rate policy.

Current level EUR/USD                1.0784           Up 0.12%


GBP/EUR edges lower due to the positive shift in consumer spending trends in Eurozone. higher-than-anticipated UK GDP data provided support for the Pound Sterling. BoE’s Pill indicated a growing belief that rate cuts might be on the horizon.


Current level GBP/EUR     1.1616(0.8605)        Down 0.08%



GBP/USD holds gains obtained after the strong GDP numbers last week showing that the UK economy had moved out of recession. Investors are now focusing on the UK employment data and the US inflation data set to be released later this week.


Current levelGBP/USD                1.2525           Up 0.03%



Other ccy levels vs C$. GBPCAD 1.7139  AUDCAD.9038  CADCHF.6630 CADJPY 113.81  CADTHB 26.88  CADCNY 5.2887 CADNOK 7.9307 CADSEK 7.9383 CADDKK 5.0583  CADZAR 13.4170


Other ccy levels vs USD. JPY 155.87  CHF.9068 AUD.6608 NZD .6007  CNY 7.2355  MXN 16.7393  INR 83.5036 PLN 3.9735 CZK 23.002 ZAR 18.3539  ILS 3.7293  AED 3.6728 KWD 0.30742


Other Major X levels. EURCHF.9773  EURJPY 167.99 EURSEK 11.7089 EURNOK 11.6927 GBPCHF 1.1361  EURAUD 1.6305 GBPAUD 1.8961 AUDCHF.5992  AUDJPY 102.99  CHFJPY 171.86