- Oil prices surge on new US sanctions.
- Canada Retail Sales data due this morning.
- US opens trading slightly higher-Commodity currencies outperform.
USDCAD open: 1.3996, overnight range 1.3987-1.4005, close 1.3998, WTI 61.76, Gold 4125.34
The Canadian dollar traded inside yesterday’s range and remains underpinned by the surge in oil prices
WTI oil prices rallied from 59.66 to 61.88 after the U.S. announced new sanctions targeting Russian oil. The American’s accused Moscow of failing to make any serious effort toward peace in Ukraine. The Treasury Department said the measures were aimed at Russia’s two largest oil companies, which it described as central to funding the Kremlin’s war machine. The move is expected to drive India’s imports of Russian crude down to zero.
Asian equity markets were mixed overnight, with Australia’s ASX 200 closing flat, Japan’s Topix falling 0.39%, and Hong Kong’s Hang Seng climbing 0.72%.
As of &:15 AM in Europe the CAC-40 is up 0.41%, the FTSE 100 has gained 0.62%, and the DAX is slightly negative at -0.10%. S&P 500 futures are steady, the U.S. Dollar Index sits at 99.12, the 10-year Treasury yield is 3.992%.
EURUSD traded in a 1.1583–1.1615 range and is treading water as traders weigh the fallout from Washington’s sanctions on Russian energy firms. Market sentiment remains cautious after President Putin’s sabre-rattling response, which included showcasing his nuclear arsenal.
GBPUSD ranged between 1.3329 and 1.3360, bouncing slightly as it tries to recover losses from yesterday’s weak inflation report. The softer data increased speculation about a Bank of England rate cut in November, though that may be delayed until after the Autumn Budget on November 24. The technical picture remains bearish while below 1.3370.
USDJPY climbed from 151.83 to 152.67 as traders priced in expectations that the new Takaichi administration will roll out additional fiscal stimulus and push back on tighter monetary policy. Analysts expect the Bank of Japan to raise rates by 0.25% to 0.75% later this year or early next.
AUDUSD rose from 0.6479 to 0.6513, supported by optimism that upcoming U.S.–China trade talks in Malaysia will yield progress. Gains are capped by growing expectations for an RBA rate cut on November 4 and investor caution ahead of tomorrow’s U.S. inflation data.
Canada Retail Sales are expected to have risen by 1.0% in August (July -0.8%) and ex-auto’s up 1.2% (-1.2% in July).
