The USD eases, oil prices tumble, equity markets are down, and US yields are mixed as risk appetite fades. The USD continues under pressure ahead of the US retail sales report later today, which could offer clues on US consumer strength amid ongoing tariff risks, and excitement over the China/US deal fades. Global equities fell as investors stepped away from higher-risk assets as global risk sentiment faded. Elsewhere, oil prices tumble as a potential US-Iran nuclear deal raises the prospect of increased global crude supply, while Bitcoin and gold declined, and the US 10-year Treasury yield fell to 4.5%. The IEA forecasted global oil demand growth to slow for the rest of the year. Today, markets will focus on Fed Chair Powell's speech, the manufacturing PPI, and US retail sales, with economists not expecting growth in April as consumers are anticipated to have reduced their purchases.
In the news. Trump says the US is close to a nuclear deal with Iran. Putin to skip Russia-Ukraine peace talks in Turkey. WTO chief warns US bilateral tariff deals could put trade principles at risk. US poised to dial back bank rules imposed in wake of 2008 crisis. Qatar orders up to 210 Boeing jets during Trump visit. APEC warns of stalling trade due to tariffs as China, US officials meet. Carney delays Canada budget, plans to cut income tax by July. Toronto's housing market sees the most price cuts in 12 years. UK economy grew more than expected in first quarter of year. Denmark rethinking 40-year nuclear power ban amid Europe-wide shift. which is . Alibaba shares drop 4% in premarket trading after big profit miss.
In currency markets. CNY stalls, AUD & NZD eased as optimism for the US-China trade tariff fades. The USD and G10 currencies stall ahead of the retail sales and comments from Fed Chair Powell later today. CNY is flat, while Asian currencies firm 0.2% on average against the USD. Trading currencies are mixed, with AUD, NOK & NZD down 0.8%, KWD, ZAR & MXN flat, DKK & SEK up 0.2%, and CHF & JPY up 0.5% against the USD.
In commodity markets. Oil prices tumbled by 4%. Natural Gas and Gold prices are down 0.5%. Silver and Wheat prices weakened by 1%. Copper prices fell by 0.8%, while Wheat prices rose by 0.2%.
CAD continues under selling pressure, underperforming against its G10 peers due to weakening oil prices, diverging interest rate spreads, and ongoing tariff uncertainty. Markets are increasingly pricing in another Bank of Canada interest rate cut in June after last Friday's disappointing jobs report. The price of oil, one of Canada's major exports, tumbled 4% amid optimism of a US/Iran nuclear deal and forecasts for lower production from OPEC. Intraday focus will be on the US retail sales, PPI and Fed Chair Powell's comments to provide direction to the loonie.
EURCAD bounces off monthly lows as the loonie is pressured by fresh selling activity due to weakening commodity prices.
EUR holds on to 1.1200 amid a softer USD ahead of key US data reports. Increasing risk aversion keeps the USD under pressure due to trade-related uncertainties ahead of today's US PPI and retail sales. Later in the day, markets will be focused on Fed Chair Powell's comments, looking for signs of a possible July rate cut. Domestically, EU GDP came in as expected at 1.2% y/y, while EU Industrial Production beat expectations, helping to provide an underlying support to the EUR. US data will be the primary driver for the euro today.
GBPEUR held steady in early trading and is up 2% monthly as the US/UK trade deal is helping provide underlying support to the pound.
GBP retests 1.3300 after the UK GDP beat expectations. The pound edges back to 1.3300 amid a softer USD as investors step to the sidelines ahead of the key US data releases. Domestically, the UK GDP y/y Q1 came in at 1.3%, which is better than expected, but down from 1.5%. The UK Finance Minister Reeves said there were clearly economic headwinds approaching, after data showed the UK's economy grew more strongly than expected in 2025. "There's clearly economic headwinds, and the world is changing." The pound continues to struggle as investors increasingly expect the Bank of England to cut interest rates in August, with markets now pricing in a 65% probability.
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