The USD eases, oil prices retreat, equity markets are mixed, and US yields are down ahead of the key jobs report. The U.S. dollar eased modestly in early trading after reaching a two-month high, as investors balanced ongoing Middle East tensions against a cautious wait for Friday's key U.S. non-farm payrolls report. While stalled U.S.-Iran peace negotiations and renewed hostilities in the Gulf continue to underpin demand for safe-haven assets, markets are increasingly focused on upcoming U.S. labour market data, which could prove pivotal for Federal Reserve interest rate expectations. Global equity markets are mixed in early trading, with weakness in technology shares weighing on U.S. futures, while European markets edged lower amid renewed geopolitical uncertainty. Investors remained cautious after Iran-backed Hezbollah rejected a new ceasefire proposal in Lebanon and Israel signalled it would maintain its military presence, complicating efforts to advance a broader U.S.-Iran peace agreement and keeping risk appetite in check. Elsewhere, oil and gold prices eased as investors monitored developments in the Middle East and assessed the outlook for global growth and inflation. Bitcoin extended its recent losses, falling toward the $62,000 level as risk appetite remained subdued and profit-taking continued across digital assets. In focus today: CAD Unemployment report, US Unemployment Rate, the key Non-Farm Payroll, CAD Ivey PMI and speeches from the BoE Governor Bailey will help drive intraday direction in currency markets.
News Headlines. Musk's SpaceX lines up retail investors for record IPO allocation. Trump lawyers refuse to reveal financial information to BBC in $10bn lawsuit. Burnham confirms he will seek to replace Starmer as UK PM. Hizbollah rejects US-brokered ceasefire as Israel pursues offensive. Stocks drop as US-Iran peace talks stall, AI rally cools. The US House backs Russia sanctions and Ukraine aid in the latest blow to Trump. Canada says AI strategy will help create 250,000 jobs and boost GDP by 3%. "Albania is not for sale", protesters say over Kushner-linked luxury resort near protected wetland. The UN doubles Lebanon aid appeal as war drives up humanitarian needs.
In currency markets. Against the U.S. dollar, major currency markets edged modestly higher in early trading as investors adopted a cautious stance ahead of Friday's closely watched U.S. non-farm payrolls report. While ongoing uncertainty surrounding U.S.-Iran peace talks continued to support the greenback, traders were reluctant to add fresh long-dollar positions before key labour market data that could shape expectations for the Federal Reserve's interest rate outlook.
In commodity markets. Oil, Gold & Natural Gas prices eased 0.25%. Silver prices weakened 1.4%. Copper prices tumbled 1.7%. Coffee prices retreated 0.75%. Soybean prices are flat, while Wheat prices gained 0.5%.
CAD edged modestly off its two-month lows in early trading, supported by a softer U.S. dollar but remaining under pressure from weak domestic fundamentals and ongoing trade uncertainty. Investors are focused on today's Ivey PMI survey and Friday's Canadian employment report, both of which could influence expectations ahead of next week's Bank of Canada policy decision. Markets will also be closely watching Friday's U.S. non-farm payrolls report, while developments surrounding CUSMA trade talks continue to weigh on sentiment towards the loonie.
EURCAD was little changed in early trading as support for the euro from expectations of an ECB rate hike next week was balanced by a modest stabilization in the Canadian dollar. The loonie remains constrained by weak domestic growth and ongoing trade uncertainty despite edging off recent two-month lows. Investors are now focused on today's Canadian employment data and the U.S. non-farm payrolls report for fresh direction.
EUR firmed towards 1.1650 in early trading as the U.S. dollar eased ahead of today's key U.S. non-farm payrolls report. The single currency continued to draw support from expectations of a near-certain ECB rate hike next week, following stronger-than-expected Eurozone inflation data. However, ongoing uncertainty surrounding U.S.-Iran peace negotiations and broader geopolitical risks are likely to keep investors cautious ahead of the U.S. labour market release.
GBPEUR gained in early trading as the euro remained constrained by cautious market sentiment and concerns that elevated energy prices could weigh on the Eurozone economy. At the same time, signs of softness in the UK labour market tempered expectations for aggressive Bank of England tightening, limiting sterling's upside. Investors continue to monitor developments in the Middle East and their potential impact on inflation and central bank policy expectations.
GBP strengthened in early trading as markets continued to price in the prospect of further Bank of England rate hikes despite signs of a slowing UK economy. The pound also benefited from a softer U.S. dollar ahead of today's closely watched U.S. non-farm payrolls report, which is expected to provide fresh guidance on the Federal Reserve's policy outlook. Investors will also be monitoring comments from Bank of England Governor Andrew Bailey later today for further clues on the UK's interest rate trajectory.
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