The Morning Update

The USD steadies, oil prices rally, equity markets are mixed, and US yields rise as geopolitical tensions ease. The US dollar is trading steady as easing Greenland-related tensions and tentative diplomatic progress, including planned talks between Ukraine and Russia, have reduced recent geopolitical risk premiums. With geopolitical pressures fading, markets are turning their attention to upcoming US data for signals on growth momentum and policy direction. Focus will also be on Friday’s S&P Global manufacturing and services PMIs for further insight into the health of the US economy. Global equity markets were mixed, with Asian stocks advancing while US futures pointed lower, setting the stage for a second straight weekly loss on Wall Street. US sentiment was weighed down by a sharp 13% drop in Intel after a weak outlook, while European markets also softened, underscoring ongoing rotation away from US equities amid geopolitical uncertainty and elevated volatility. Elsewhere, oil prices rallied on firmer supply and demand dynamics, supporting energy markets. Gold eased back from record highs as some safe-haven demand unwound, while Bitcoin remained capped near the $90,000 level amid lingering macro uncertainty. In focus today, the US S&P Global Manufacturing & Services PMI will be the primary driver, with CAD Retail Sales also in focus to help drive intraday direction.

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In the news. NATO chief and Trump discussed revamp of US-Denmark military deal. France seizes Russia-linked oil tanker in the Mediterranean. The US pushes Russia & Ukraine towards direct talks in Abu Dhabi. Trump sues JPMorgan & CEO Dimon for $5bn over debanking. Trump revokes Canada's invitation to join the Board of Peace. US control of Venezuela's oil risks a debt restructuring showdown with China. TikTok seals deal for new US joint venture to avoid American ban. Intel struggles to meet AI data centre demand, shares drop 13%. Porter Airlines to close crew bases in Thunder Bay & Halifax in May.

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In currency markets. Against the US dollar, the Japanese yen firmed on renewed safe-haven demand and expectations of a less accommodative policy stance from the Bank of Japan. The New Zealand dollar eased as risk appetite softened and investors reassessed the near-term outlook for RBNZ policy. Meanwhile, the Chinese yuan gained modestly after a firmer PBoC fixing signalled support for currency stability. CNY & Asian currencies up 0.15% on average, against the USD. Trading currencies are mixed, with CHF & PLN falling 0.2%, NZD, DKK, & CZK down 0.1%, KWD, NOK & ZAR flat, MXN up 0.1%, and AUD & JPY gaining 0.2% against the USD.

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In commodity markets. Oil, Copper & Coffee prices strengthen 1.5%. Natural Gas prices firmed by 0.75%. Gold & Soybean prices up by 0.25%. Silver prices rallied 2.45%, and wheat prices gained by 0.5%.

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CAD is holding near multi-week highs as investors remain cautious on US policy uncertainty and take encouragement from supportive domestic fundamentals. Commodity prices have shown signs of stabilization, helping underpin the loonie, while attention now turns to upcoming US PMI reports and Canadian retail sales data for fresh cues on growth momentum and near-term direction.

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EURCAD edged lower as the euro eased after its recent advance, while the Canadian dollar found support from stronger commodity prices. The pair remains sensitive to upcoming Canadian retail sales data and broader risk sentiment, with markets also watching US PMI releases for additional direction.

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EUR eased modestly, with EUR/USD pulling back from recent multi-week highs as investors locked in profits after the recent rally. While Eurozone PMI data showed private-sector activity expanding at a steady pace, it was not strong enough to drive fresh upside, leaving markets focused on upcoming US PMI releases and broader risk sentiment for near-term direction.

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GBPEUR edged higher as sterling found support from UK retail sales and PMI data, which pointed to resilient consumer demand and steady private-sector activity. By contrast, softer German and Eurozone PMI readings capped euro strength, leaving the cross tilted in favour of the pound as improved risk sentiment following the easing of US–EU tensions continued to underpin broader markets.

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GBP remained well supported after Bank of England policymaker Megan Greene signalled concern over persistent wage growth and inflation expectations, arguing for a slower pace of rate cuts. The pound was further underpinned by today’s stronger-than-expected UK retail sales and PMI data, which reinforced resilience in consumer demand and business activity, reducing near-term expectations for BoE easing.