The Morning Update

We close out the week with the USD unchanged, oil prices higher, equity markets edging higher, and US yields flat. Yesterday brought softer US labour signals and cautious Fed rhetoric, with key inflation and jobs data still ahead. the White House said Trump preferred diplomacy with Iran, with high stakes talks starting Friday in Oman, but warned military options remain as the U.S. builds up forces in the region. Trump backed Japan’s PM Takaichi ahead of Sunday’s election, with markets watching her spending and defence agenda. Bitcoin is up 5% this morning after yesterday’s sell-off down 18% so far in February.

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News Headlines. Canada will open its first Greenland consulate on Friday alongside France, backing Greenland’s self-determination amid Trump’s threats. The U.S. urged a new arms control deal after the START treaty expired, rejecting Russia’s proposed one-year extension. Brazil is weighing a partial a partial Mercosur–China trade agreement, signaling a major shift as global tariffs reshape trade ties. Lebanon accused Israel of spraying a powerful weedkiller over southern villages at dangerously high concentrations, while Israel has not commented on the allegations. A South Korean official hinted at imminent progress on North Korea issues, though not tied to renewed U.S.-Pyongyang talks.

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In currency markets.  USD/JPY remains under pressure ahead of Japan’s election as traders stay cautious. Falling markets and softer US jobs data are also boosting expectations of Fed rate cuts, which could weigh on the Dollar. Other Asian currencies are trading higher against the greenback, with the CNY up 0.6%, KRW up 0.31%, and THB up 0.56%. The AUD and NZD are also gaining, with the Aussie up 0.85% and the Kiwi higher by 0.71%. High-yielding currencies are performing well, with the ZAR and MXN both up nearly 0.9%.

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In commodity markets. WTI crude oil futures rose over 1% on Friday, reversing earlier losses, as disagreements over the agenda in high-stakes US–Iran talks raised doubts about progress. Gold and silver had a tumultuous week, with gold up 2.3% today (flat on the week), while silver is up 5% today but still down 12% for the week. Agricultural commodities are mixed today, with soybeans up 0.35%, while wheat and lumber are down 0.05% and 0.34%, respectively.

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USD/CAD pair slips slightly to around 1.3685 in early European trading on Friday. The US Dollar weakens against the Canadian Dollar due to softer US economic data and higher oil prices. Investors will watch the preliminary February Michigan Consumer Sentiment Index later in the day.

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EUR/CAD has seen modest moves as markets watch euro-zone data and commodity-linked Canadian dollar strength.

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EUR/USD holds steady as ECB officials strike a cautious tone on inflation and growth.

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GBP/EUR rose toward 1.1520 on Friday as the Euro pulled back, though the pair is still headed for its first weekly gain in two months.

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GBP/USD rebounds this morning as markets digest the BoE’s decision to keep rates unchanged, passed by a narrow 5–4 vote, with four members favoring an immediate 25 bps cut.

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