- Carney government survives no-confidence vote-budget passes.
- Equity markets under pressure
- US dollar trading modestly bid on safe haven demand
USDCAD open: 1.4036, overnight range 1.4035-1.4063, close 1.4057, WTI 59.89, Gold 4044.14
The Canadian dollar recovered from its session low after global stocks tumbled ahead of incoming US data. In addition, a fresh round of handwringing over stretched valuations, especially in anything with an AI label added to the angst.
Prime Minister Mark Carney’s government narrowly survived the budget no-confidence vote, scraping through by just two votes. The outcome was expected, but the slim margin did little to strengthen confidence in his fiscal blueprint.
Wall Street’s rough session yesterday set off a global rush for the exits, with equity markets from Tokyo to London following the selloff. The US dollar managed a brief safe-haven pop in Asia, but the enthusiasm fizzled before New York traders even settled in. Hawkish chatter from Fed officials has also chipped away at expectations for a December rate cut, now sitting near 46%, even though Christopher Waller continues to argue that easing is appropriate. Mixed messages rarely calm nerves.
Trump quietly reversed $1.0 billion worth of reciprocal tariffs on Philippine agricultural goods.
Traders are also stepping lightly ahead of the slow return of US economic releases as the data blackout from the shutdown begins to unwind.
The US Labor Department reported weekly jobless claims at 232,000 for the period ending October 18. It barely moved the needle. With September’s employment report due Thursday, the claims figures felt like filler material.
Asian stocks sank sharply, led by a 2.88% slump in Japan’s Topix. Hong Kong’s Hang Seng shed 1.72% and Australia’s ASX 200 fell 1.94%.
As of 7:35 am, European markets picked up the selling baton, with the DAX down 1.45%, the CAC 40 off 1.43%, and the FTSE 100 lower by 1.38%. S&P 500 futures are pointing 0.45% lower, the US Dollar Index sits at 99.54, and10-year Treasury yields hover near 4.10%
EURUSD traded in a 1.1580-1.1607 range and is pinned near the lows with traders unwilling to take positions without fresh Eurozone data. Most are simply waiting out the clock until US inflation figures land tomorrow, which should set the tone for the next directional push. Until then, the currency is likely to meander inside a 1.1560-1.1660 corridor.
GBPUSD traded in a 1.3141-1.3177 range and stayed on the defensive ahead of US data and lingering UK budget jitters. Tomorrow’s UK inflation release could decide whether the Bank of England trims rates in December. Adding to the noise, London is preparing retaliatory steps against looming EU tariff hikes on steel, a reminder that trade spats aren’t limited to Washington.
USDJPY traded in a 154.82-155.44 band and continues to edge higher despite the Japanese finance minister warning that the move is one-sided and uncomfortably fast. Broader tensions between China and Japan are also giving USDJPY a tailwind as investors shy away from regional risk.
AUDUSD traded in a 0.6465-0.6505 range and is clinging to the top of that band early in New York. Support comes from RBA minutes that sounded just hawkish enough to convince markets that rate cuts aren’t on the immediate horizon.
