- Risk sentiment rises on Israel and Lebanon ceasefire talks.
- Oil prices are trading sideways and above support.
- The US dollar is trading quietly but defensively
USDCAD open: 1.3729, overnight range 1.3713-1.3742, close 1.3743, WTI 92.60, Gold 4813.71
The Canadian dollar inched higher due to improved global risk sentiment. Israel and Lebanon are holding ceasefire talks today which traders view as an encouraging sign. However future direction remains tied to broader US dollar flows and crude prices while Canadian influences are sidelined.
WTI is treading water in a 90.54-93.00 range as traders await clarity from ongoing ceasefire discussions involving the US, Iran, Israel, and Lebanon. A decisive break below $86.00 would open the door to a deeper slide toward $70.00.
Global risk appetite improved on reports that the Israeli cabinet is weighing a ceasefire with Lebanon, with talks expected later today. Separate headlines suggest Washington and Tehran are also exploring an extension of their truce.
For markets, the conflict might as well be finished. The S&P 500 and NASDAQ pushed to fresh record highs, joining Japan’s Nikkei 225.
European equities are closing in on similar milestones, buoyed by the same wave of optimism. Crude has backed off its March highs, but WTI continues to find a floor above 90/b as tanker traffic through the Strait of Hormuz stabilizes. FX markets are less convinced. The US dollar index has clawed back recent losses, though the broader bias still points lower.
Asian stocks advanced, led by a 1.17% gain in Japan’s Topix and a 1.72% rise in Hong Kong’s Hang Seng, while Australia’s ASX 200 slipped 0.26%.
European markets are trading positively. The German DAX is up 0.52%, the UK FTSE 100 has gained 0.61% and the French CAC 40 is up 0.47%. S&P 500 futures are up 0.12%, the US 10-year yield sits at 4.266%, and the DXY is 98.17.
EURUSD traded in a 1.1775-1.1824 range. Further upside may prove elusive as expectations for an ECB rate hike this month have faded. Eurozone inflation edged above forecasts in March, with HICP at 2.6% y/y versus 2.5% expected and 1.3% m/m versus 1.2%. Core readings were in line and unchanged, leaving the broader trend intact while prices remain above 1.1670.
GBPUSD traded sideways in a 1.3533-1.3595 range. Support following stronger UK GDP, which rose 0.5% m/m in February compared to 0.1% previously faded quickly.
USDJPY inched higher in a 158.27-159.13 range but traders are cautious ahead of the 160.00 areais do to elevated risks of FX intervention.
AUDUSD traded in a 0.7163-0.7198 range, consolidating recent gains. Strong Chinese data, a hawkish RBA stance, and fiscal stimulus following increased defence spending plans supported prices.
US weekly jobless claims are forecast to fall by 4,000 to 215,000 and the Philadelphia Fed Manufacturing Survey expected at 10 versus 18.1 previously. Capacity utilization and Industrial Production are also due. None of today’s releases are likely to shift expectations that the Fed will remain on hold at the April 29 meeting.
