The USD steadied, oil prices eased, equity markets are mixed, and US yields eased as risk sentiment improves. The USD holds steady to start the month after suffering its most significant monthly fall in over 2 1/2years in April. The JPY weakened nearly 1% after the Bank of Japan lowered its growth forecast and kept rates on hold, citing caution due to US tariffs. Global equities are mixed, while U.S. futures strengthened due to stronger-than-expected tech earnings and the prospect that the Trump administration may be close to announcing the first round of trade deals aimed at reducing planned tariffs. Elsewhere, oil prices remain under pressure after suffering their worst month since 2021 on the prospect of global growth concerns and increased output by OPEC. Gold weakens for a third trading day as risk sentiment improves on the prospect of easing US tariffs. In focus today,US Initial jobless claims, US Manufacturing PMI and CAD Manufacturing PMI will help provide intraday direction to currency markets.
In the News. The US and Ukraine sign natural resources deal. China signals opening for trade talks with US. Tesla board denies launching search for Musk's successor. Brussels demands UK fishing rights in return for food standards deal. The Bank of Japan slashes growth forecast on tariff fears. UK in talks with France and Saudi Arabia over recognising a Palestinian state. Foreign companies flock to 'panda bond' market in hunt for China hedge. Couche-Tard advances deal talks for Japan's Sever & i with access to books. PM Carney reiterates commitment to Ukraine to call with Zelensky. PM Carney to visit White House, Trump says Carney wants to 'make a deal.'
In currency markets. Investors remain bullish on the Korean Won, Taiwan Dollar, Malaysian Ringgit, and Philippine Peso which is sitting at near 8 month highs against the USD. AUD weakens, under pressure from tumbling gold prices. Major currencies are steady as investors await key US jobs data on Friday. CNY is flat, while Asian currencies slip 0.1% on average against the USD. Trading currencies are mixed with, JPY tumbling 0.9%, ZAR & AUD weakened 0.4%, SEK fell 0.3%, MXN down 0.2%, and CHF, DKK & NOK flat against the USD.
In commodity markets. Oil prices weakened 1.9%. Natural Gas Prices rallied 2.4%. Gold prices tumbled 2.4% Silver prices fell 1.2%. Copper prices strengthened 1%. Wheat prices firmed by 0.4%, and Soybean prices eased 0.45%.
CAD slips from its six-month highs in early trading as the USD advances and risk sentiment improves. In April, the loonie posted its strongest monthly gains in a decade, advancing over 4% against the USD due to cooling tariff tensions and the end of domestic political uncertainty. We expect the loonie to remain under pressure today as oil and gold prices stay subdued, and as investors favour the USD on strong tech earnings. Intraday, the focus will be on the US and CAD manufacturing PMI reports to provide guidance to the markets.
EURCAD edges higher in early trading, as weakening commodity prices put pressure on the loonie.
EUR steadies above 1.1300 as focus shifts to US inflation data. The euro continues to face pressure as investors favour the greenback, fueled by growing optimism between the US and China, as well as other Asian countries. Investors will be monitoring the US Manufacturing PMI, which is expected to ease to 48 from the previous 49 in March. If the PMI data meets expectations, we anticipate the euro will remain sidelined as investors await the key US jobs reports on Friday.
GBPEUR holds steady for a second day as investors anticipate a 25bps cut by the ECB at its next meeting, following softer eurozone inflation data. Simultaneously, a dovish Bank of England is putting pressure on the pound.
GBP remains capped at 1.3350 as markets await US data and remain cautious ahead of Friday’s US jobs report. The pound continues to be under pressure as sentiment turns increasingly dovish, with investors expecting a 25 bps cut by the Bank of England at its meeting on May 8th. There is growing optimism about a softening stance on US tariffs, with President Trump stating yesterday that there is a good probability the US will reach a deal with China.In the short term, we expect the pound could retest 1.32 against the USD.
For clients based in the European Economic Area, payment services for Payments International Inc. are provided by CurrencyCloud B.V..Registered in the Netherlands No. 72186178. Registered Office: Nieuwezijds Voorburgwal 296 - 298, Mindspace Nieuwezijds Office 001 Amsterdam.CurrencyCloud B.V. is authorised by the DNB under the Wet op het financieel toezicht to carry out the business of an electronic-money institution (RelationNumber: R142701).
Payment services in the United States are provided by Visa Global Services Inc. (VGSI), a licensed money transmitter (NMLS ID 181032) in the states listed here. VGSI is licensed as a money transmitter by the New York Department of Financial Services. Mailing address: 900 Metro Center Blvd, Mailstop 1Z, Foster City, CA 94404. VGSI is also a registered Money Services Business (“MSB”) with FinCEN and a registered Foreign MSB with FINTRAC. For live customer support contact VGSI at (888) 733-0041.
For clients based in the United Kingdom and rest of the world, payment services for Payments International Inc. are provided by The Currency Cloud Limited. .Registered in England and Wales No. 06323311. Registered Office: StewardshipBuilding 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic MoneyRegulations 2011 for the issuing of electronic money (FRN: 900199)
