- Trump’s 48-hour deadline ends Tuesday
- Reuters reports there is a US/Iran ceasefire plans circulating
- The US dollar opens softer in extremely thin, holiday markets.
USDCAD open: 1.3920, overnight range 1.3916-1.3948, close: Thurs. 1.3922, Fri. 1.3946, WTI 111.44, Gold 4693.82.
The Canadian dollar is trading with a negative bias despite the modest uptick in oil prices and a Reuters report indicating that Iran and the US are reviewing a ceasefire framework. That headline appears to have taken some of the sting out of Trump’s “unhinged” threat to target major Iranian infrastructure if the Strait of Hormuz is not reopened within 48 hours, a deadline that expires tomorrow.
The Iran conflict continues to sideline economic data, and with widespread Easter Monday market closures, USDCAD price action is likely to remain subdued.
Oil traders pushed WTI from 108.95 to 115.37 before the move faded in extremely thin markets. OPEC announced a roughly 200,000 barrel/day increase in production quotas beginning May 1, which weighed on prices, but only slightly due to the Strait of Hormuz being closed.
Traders largely ignored Friday’s release of the March nonfarm payrolls report. The US added a whopping 178,000 new jobs, easily beating the consensus forecast for a 60,000 gain and fully erasing the February loss of 133,000 jobs. February’s data was skewed by weather and a health care workers strike. The unemployment rate ticked down to 4.3% from 4.4%.
The market reaction was underwhelming because a) only US traders were working b) the numbers are overshadowed by the Iran war c) the numbers reinforce the Fed’s “unchanged” monetary policy stance.
Today’s ISM Services PMI data (forecast 55, previous 56.1) will suffer the same fate as the focus is on Trump’s Tuesday deadline.
Asian equities were mainly closed except for Japan’s Topix, which finished unchanged.
European markets are closed. S&P 500 futures are up 0.22%, the 10-year Treasury yield is 4.352%, the DXY is 99.90, and gold (XAUUSD) is 4,688.90.
EURUSD traded in a 1.1505-1.1569 range since Friday and is at 1.1550 in NY. Flows are extremely light due to holidays. The technical bias is negative. EU financial markets were closed.
GBPUSD climbed in a 1.3179-1.3260 range and firmed due to hopes for a ceasefire in Iran after the Reuters report. The UK was closed.
USDJPY drifted sideways in a 159.31-159.82 range. The BOJ warned that surging oil costs may hurt the economy, which suggests the barrier to higher interest rates is rising.
AUDUSD inched higher in a 0.6877-0.6937 range and rose due to modestly improved risk sentiment because of hopes for a US/Iran ceasefire. Australia was on holiday today.
