- Global equities rise on Iran/US optimism
- Canada Retail Sales should be a non-event for traders
- US dollar remains bid on hawkish Fed outlook
USDCAD open: 1.3791, overnight range 1.3773-1.3800, close 1.3780, WTI 98.45, Gold 4,531.45
NOTE: There will not be a KBFX Daily on Monday due to the US and UK holidays.
The Canadian dollar inched higher overnight and in early NY trading as the lingering impact of the hawkish FOMC minutes continues to underpin the greenback.
Canada's March Retail Sales excluding autos are forecast to climb to 0.9% from 0.5% month-over-month, though the number is unlikely to register much in FX markets.
WTI crude shed nearly seven dollars, sliding from 102.82 to 95.74 on growing optimism that Washington and Tehran are edging toward a deal. Overnight the contract held a 96.94-99.41 range. The sticking point remains Iran's enriched uranium stockpile -- the US wants it removed, Iran is refusing.
US Michigan Consumer Sentiment is seen coming in at 48.2, matching last month's reading.
US and UK markets are shuttered Monday for public holidays, a fact that is draining conviction from Friday's session as traders position for an early exit ahead of the long weekend. The US-Iran standoff is adding another layer of paralysis, with a steady stream of contradictory signals from officials on both sides leaving markets unable to price the risk with any confidence.
Kevin Warsh takes the oath as Fed Chair today. Trump tapped him expecting a more accommodative hand on rates, but the FOMC is pushing back. Tariffs and the Iran conflict are being flagged internally as potential inflation accelerants, and Chicago Fed President Austan Goolsbee put it plainly yesterday, warning that a meaningful inflation problem is taking shape.
Asian equities traded unevenly. The Topix added 1.64% and Australia's ASX 200 gained 1.47%, while the Hang Seng lost 1.03%.
As of 7:40 am, the French CAC 40 is down 0.28%, the German DAX has lost 0.58%, and the UK FTSE 100 is down 0.20%. S&P 500 futures have fallen by 0.13%, the 10-year Treasury yield is 4.56%, and DXY is 99.36.
EURUSD meandered between 1.1570 and 1.1670, with marginally better German Q1 GDP and Ifo readings doing little to shift sentiment. A run of soft Eurozone PMI prints alongside firmer inflation has stoked stagflation concerns, complicating the ECB's rate path.
GBPUSD held a narrow 1.3413-1.3440 band as an unexpected improvement in GfK consumer confidence, printing at -23 against a -28 forecast, was quickly overshadowed by retail sales rising only 1.1% against expectations of 1.5%. The miss reinforced the narrative of an economy running below potential.
USDJPY drifted in a 158.90-159.15 range, caught between supportive US treasury yields and the ever-present threat of intervention. Japanese inflation excluding fresh food came in at 1.4%, short of the 1.7% forecast and well below March's 1.8% reading, taking some pressure off the BoJ to move on rates anytime soon.
AUDUSD bounced in a 0.7125-0.7158 band, while keeping the week's gradual upward bias. The hawkish lean in the latest FOMC minutes and growing conviction that the RBA is stepping back from its tightening cycle are together keeping a lid on further gains.
