The Morning Update

The US$ pauses, oil prices are flat, equity markets gain, while US yields are mixed as risk sentiment improves. The US$ index weakness pauses near 1-year lows, while equity markets rise, set for the 4-straight weekly gain buoyed by hopes that the Fed could pause its rate-hike cycle following the cooler-than-expected inflation data in March. Today investors will watch for big-bank earnings with JPMorgan, Wells Fargo & Citibank set to report before the opening bell. On the economic docket, US Retail Sales, Michigan Consumer Sentiment April, CAD Manufacturing Sales, Fed Waller & BoE Tenreyro speeches to help provide intraday direction.                                                                                                                                                              

In other news. The FBI arrests 21-year-old National Guardsman for online intelligence leaks. ECB Needs more rate hikes and faster balance sheet cuts says policymaker Wunsch. German foreign minister warns China on Taiwan. Ukraine forces pull back as Russia mounts ‘re-energized’ Bakhmut assault, UK says.Tesla expands discounts with price cuts in Europe, Singapore & Israel. French protests reach climax ahead of today’s ruling on Macron’s controversial pension reform plan.

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‍In currency markets. The US$ index is set for its longest stretch of weekly losses since 2020 as expectations of an end to the Fed rate-hike cycle following signs inflation may be cooling. CNY hits a 3-week high, CAD jumps to 2-month highs & Bank of Korea chief says he’s not worried about US$/KRW rates. CNY firms 0.25%, while Asian currencies are flat on average vs US$. Trading currencies are mixed with CHF & SEK gain 0.15%,while JPY is flat, NZD, NOK & AUD down 0.1%, ZAR slips 0.25%, MXN weakens0.5% vs US$.

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Oil prices stall after the IEA says OPEC+ supply cuts could exacerbate an oil supply deficit and hurt consumers. C$ extends through 2-month highs breaching the key 0.75 cents (1.3333) as softer-than-expected US inflation data puts selling pressure on the US$. BoC Governor Macklem said in comments that the banking stress in the US & Europe has had a limited impact on Canada’s financial system. Markets will be focused on US Retail sales for intraday direction. Support resets to 1.3265, while resistance lowers to 1.3390.

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EURCAD holds steady in early trading, with Euro remaining up ½%vs CAD in April. Support remains at 1.4650 while resistance holds at 1.4800.

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Euro continues to edge higher amid persistent US$ weakness. Euro continues to edge higher on the back of a weakening US$ as risk-on mood improves as expectations of a Fed pausing increases. Today US Retail Sales will be in focus after Fed Williams said they will look at the sales data to see the impact of restrictive policy on the activity. Support holds at 1.0950 while resistance remains at 1.1085.

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GBPEUR weakens in early trading as the EUR remains strong while the pound weakens on domestic economic concerns. Support lowers to 1.1250 (.8888) while resistance lowers to 1.1400 (.8719).

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GBP fails to extend beyond 10-month highs ahead of US Retail Sales. The pound fails to extend gains as the US$ sell off pauses heading into the US Retail Sales report. Domestic concern from ongoing strikes and signs that the UK economy is stagnating is expected to cap further short-term GBP gains. Support holds at 1.2400 while resistance remains at 1.2550.

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