- Oil prices rise after Trump rejects Iran counter proposal
- China’s Trade surplus widens.
- The US dollar opens slightly firmer against the majors.
USDCAD open: 1.3590, overnight range 1.3578-1.3623, close 1.3620, WTI 92.98, Gold 4,727.32.
The Canadian dollar recouped Friday’s losses overnight thanks to another surge in oil prices Otherwise, it was a quiet session with traders awaiting fresh developments with the US and Iran war.
At the Asia open, global markets jump into full risk-off mode at the Asia open but changed their tune. Trump rejected Iran’s counterproposal saying "I don't like it — TOTALLY UNACCEPTABLE!" His comments do not do anything to speed up the reopening of the Strait of Hormuz.
The US and China relationship will be the focus when Trump sits down with Xi Jinping in Beijing on Thursday. China's trade surplus rebounded sharply from $51.23 billion in March to $84.82 billion in April, with exports climbing 14.1% year-over-year — a number that will do nothing to soften Washington's mood heading into the summit.
Asian equity markets ended the session mixed. Japan's Topix added 0.30%, Hong Kong's Hang Seng was little changed, and Australia's ASX 200 slipped 0.49%.
As of 7:30 am, the UK FTSE 100 is flat while the German DAX is down 0.17% and the French CAC 40 has lost 1.02%. S&P 500 futures are unchanged, the 10-year Treasury yield is 4.395%, and the DXY is 97.97.
EURUSD ticked higher in a 1.1748-1.1782 band although the topside continues to face headwinds from trade. Trump set a July 4 deadline for the EU to ratify the Turnberry trade agreement, threatening sharply higher tariffs if Brussels misses it.
GBPUSD drifted in a 1.3557-1.3615 range. Prices dipped at the Asia open after Trump rejected Iran’s proposal before recovering once it became clear hostilities had not resumed. Domestically, Prime Minister Starmer is staking his political future on a reset of UK-EU relations, even as a vocal minority of his own backbenchers call for his departure.
USDJPY is steady in a 156.56-157.18 range. Traders are concerned about BoJ intervention risk, especially with US Treasury Secretary Bessent's arrival in Tokyo this week. Rising oil prices from the Iran conflict, and the timing of the BoJ’s next rate hike are adding another layer of concern for traders.
AUDUSD consolidated in a 0.7239-0.7248 band, supported by divergent Fed and RBA interest rate policies.
The US and Canadian economic calendars are empty.
