- Trump says he will provide Navy escorts through Strait of Hormuz
- Asian equity markets tank, European equities rise.
- US dollar opens mixed but remains quietly bid.
USDCAD open: 1.3671, overnight range 1.3644-1.3700, close 1.3679, WTI 75.15, Gold 5189.54
The Canadian dollar caught a bit on an updraft overnight, mainly because of steady to firm crude prices. It doesn’t hurt that Canada is not in the firing line. The country remains safely outside the range of Iranian missile technology.
Prime Minister Mark Carney is in Australia as part of an ongoing mission to diversify Canada’s trade reach across Asia. According to The Globe and Mail, Carney hopes to establish a critical minerals alliance and smooth the road to government-backed investments in projects that benefit both nations.
WTI oil hit a peak of 77.22 during European trading before retreating to 74.39 as New York markets opened. Trump’s comments about the US providing naval escorts and insurance for tankers moving through the Strait of Hormuz helped to limit gains.
Bank of Canada Governor Tiff Macklem is scheduled to speak at 10:30 am today.
The US Senate is considering a bipartisan war powers resolution aimed at halting Trump’s military campaign in Iran. Even if the measure passes the Senate, the path to becoming law remains long and uncertain.
Today’s focus (aside from Iran) is the ADP release of February employment numbers with economists expecting a gain of 50,000 jobs following January’s 22,000 increase. In addition, the ISM Services PMI, the ISM Employment Index, and the ISM Prices Paid components are also scheduled for release.
Asian equity markets had another rough session. Japan’s Topix tumbled 3.67%, Hong Kong’s Hang Seng dropped 2.201%, and Australia’s ASX retreated 1.94%.
As of 7:30 am, Germany’s DAX is higher by 1.26%, France’s CAC 40 has gained 0.80%, and the UK FTSE 100 is up 0.58%. The DXY is 98.85 and the 10-year US Treasury yield is at 4.081%.
EURUSD traded in a 1.1574-1.1647 range and is near 1.1643 in New York trading. Market sentiment deteriorated after Trump threatened to halt all trade with Spain because Madrid refused to allow US forces to use its military bases for operations against Iran. Meanwhile, Eurozone Composite PMI came in at 51.9 as expected, while Germany’s Composite PMI was reported at 53.2, slightly above the 53.1 forecast.
GBPUSD traded in a 1.3304-1.3399 range and is around 1.3377 in New York. UK Composite PMI was 53.7 (forecast 53.9) but was ignored.
USDJPY traded in a 156.86-157.86 range. Gains toward the top of the band were restrained by concerns that Japanese authorities could intervene in currency markets, while the downside has been supported by broad US dollar demand.
AUDUSD traded in a 0.6985-0.7045 range. The currency pair found a bit of support from stronger-than-expected Q4 GDP numbers (actual 0.8% q/q, vs forecast 0.6%).
