- PM Carney faces non-confidence vote today
- US economic data begins trickling today.
- US dollar trading sideways and opens on mixed note
USDCAD open: 1.4032, overnight range 1.4016-1.4039, close 1.4023, WTI 59.96, Gold 4069.53
The Canadian dollar is grinding slowly lower in an uneventful overnight session. The greenback has a bit of a bid due to reduced odds that the Fed cuts rates at its December meeting.
The Canadian dollar could see a bit of excitement if Prime Minister Carney’s government fails to survive a budget non-confidence vote. He needs two votes from other party’s otherwise the government will fall and Canadians will be heading to the polls.
WTI oil prices are trading in a 59.23-60.21 range supported by renewed demand for Middle East oil by China and India but gains are stalled because of Opec’s increased production.
The flow of US economic reports begins to reopen today with the August Construction Spending numbers, which are expected to match the previous month’s 0.1% decline.
The odds of a Fed rate cut sit at 44.6% according to the CME FedWatch tool, and recent commentary from senior Fed officials is pushing those expectations lower.
Asian equity markets ended mostly lower, with Australia’s ASX 200 the lone flat performer. Japan’s Topix slipped 0.37% and Hong Kong’s Hang Seng fell 0.71%.
As of 7:40 am, the German Dax lost 0.68%, the French CAC 40 has fallen 0.49% and the UK FTSE 100 is down 0.21%. S&P 500 futures are flat, the U.S. Dollar Index sits at 99.37, and the 10 year Treasury yield is 4.12%.
EURUSD traded in a 1.1595 to 1.1625 range and is hovering near the lower end of that band after the European Commission released its Autumn forecasts. Officials expect Euro area growth to accelerate in 2025, rising to 1.4%, although the pace is projected to ease to 1.2% in 2026. A separate highlight was Switzerland securing a new trade agreement with the US that cut tariffs to 15% from 39%, reportedly helped along by diplomatic gift giving that included a gold Rolex table clock.
GBPUSD moved in a 1.3136 to 1.3181 band during a choppy session influenced by renewed anxiety over next week’s UK budget. Those concerns spilled into the gilt market and, combined with a 1.8% monthly drop in the Rightmove House Price Index, pressured sentiment.
Traders now look to Wednesday’s CPI and PPI data for direction.
USDJPY traded between 154.42 and 154.87, supported by a mix of weaker Japanese data and lingering political tension with China. Japan’s Q3 GDP contracted 1.8% after a 2.3% decline in Q2, though the latest figure was slightly better than forecasts. The GDP price index rose 2.8% quarter over quarter but still undershot expectations. Diplomatic friction resurfaced when Chinese Premier Liu Jinsong declined to meet Japan’s Prime Minister Sanae Takaichi at the G20 due to lingering resentment over comments about Taiwan.
AUDUSD traded in a 0.6509 to 0.6538 range, finding modest support from the belief that domestic monetary policy remains restrictive enough to restrain inflation. Broader US dollar sentiment is steering price action as markets look ahead to the incoming slate of US data.
