The Morning Update

Tuesday May 7th , 2024

Written by:
Bernard Gauvin

Mirroring yesterday, the USD, equity markets and oil prices are trading higher while treasury yields are hedging lower. The market is still digesting last week weaker than expected US employment figures while trying to figure out the Fed’s next move. Fed Barkin said on Monday that the current interest rate level should cool the economy enough to bring down inflation to the Fed's 2% goal. With little in the way of US economic data the market, the USD maybe driven by other countries data.


In other news.  Hamas has agreed to the term of a ceasefire deal brokered by Egypt and Qatar – details are yet tobe unveiled. While reviewing the proposal, Israel has taken control of crossings from Gaza to Egypt as truce talks resume. Putin is sworn in for the 5th time as President. India elections which started on April 19th are nearing their half-way point in a seven-phase election. Ballots are set tobe counted on June 4th. Modi is widely expected to win a comfortable majority.


In currency news. The MXN fluctuates between tepid gains and losses as many traders wait on the sidelines for key inflation data and the Bank of Mexico policy meeting decision on “super” Thursday. The USD/JPY extends gains for the second successive session but could face some headwind due to last weeks US week employment figures. Japan warns of action over rapid currency move. The USD has gained some strength against the CNY (0.15%), the JPY (0.47%), AUD (0.47%) and NZD (0.12%). While the trading currencies are mixed with the ZAR appreciating against the USD (0.14%) and the MXN down 0.10%. 


In commodity markets. Oil steadied (down 0.01%) as weakness in the physical market countered concern about conflict inthe Middle East. Gold, silver and copper prices are down 0.10%, 0.74% and 0.63%respectively in this morning trading. As for the agricultural commodities, wheat and soybean soared on worries of crop damage in Brazil and Russia. 


Current level USD Index               105.245           Up 0.18%


The USD/CAD remains in a narrow range as we await the Purchase Manager’s Index (PMI) later this morning after which the focus will be on Canadian employment figures later in the week.


Current level USD/CAD               1.3680            Up 0.12%


The EUR/CAD is moving slightly lower while still stuck in a narrow range.


Current level EUR/CAD                1.4724           Up 0.06%


EUR/USD This morning retail sales figures came in stronger than expected at 0.8% (exp. 0.6%) which is having very little impact. The currency pair is broadly sideways amid indecisiveness among investors due to the absence of high-tier data in the US and the Eurozone.


Current level EUR/USD                1.0762           Down 0.05%


GBP/EUR the GBP lost ground drivenby the disappointing Retail Sales report from the United Kingdom (UK) andstronger than expected retail sales in the Eurozone.


Current level GBP/EUR     1.1647 (0.8582)        Down0.12%


GBP/USD loses ground against the USD as investors see the BoE easing interest rates before the Fed does so.


Current level GBP/USD                1.2536           Down 0.18%



Other ccy levels vs C$. GBPCAD 1.7155 AUDCAD .9031  CADCHF.6634 CADJPY 112.88  CADTHB 26.93 CADCNY 5.2749  CADNOK 7.9430 CADSEK 7.9317 CADDKK 5.0637  CADZAR13.4923


Other ccy levels vs USD. JPY 154.52 CHF.9075  AUD.6600 NZD .6004  CNY 7.2175  MXN 16.8651  INR83.4920  PLN 4.0080 CZK 23.238 ZAR 18.4589  ILS 3.7453  AED3.6729  KWD 0.30723


Other Major X levels. EURCHF.9769 EURJPY 166.30  EURSEK 11.6846 EURNOK 11.7001 GBPCHF 1.1379 EURAUD 1.6305  GBPAUD 1.8993 AUDCHF.5992  AUDJPY 101.99 CHFJPY 169.94