– Markets shift into consolidation gear ahead of US inflation data.
– Prime Minister Mark Carney names his cabinet today.
– US dollar opens lower compared to yesterday’s close-CAD is the laggard.
USDCAD: open 1.3983, overnight range 1.3958-1.3994, close 1.3975, WTI 62.36, Gold 3253.55
The Canadian dollar is marking time ahead of today’s US inflation data and news about Prime Minister Carney’s new cabinet picks.
Canadian dollar gains appear to be limited after Canada’s weak employment report (released Friday increased the odds for another Bank of Canada rate cut on June 4.
WTI is treading water in a 61.65–62.55 band as traders weigh opposing drivers. On one side, Saudi Arabia is pushing for output hikes as payback for OPEC members ignoring quota limits. On the other, the easing of US-China trade tensions could reignite global crude demand.
Traders shifted their focus back to economic data after the cooling of trade tensions between the US and China, though market responses are expected to remain cautious as Trump can change his mind at any time.
Today’s focus is inflation, and the US April CPI data is expected to show it didn’t change from March, (Forecast 2.4% y/y.) The data should have limited impact on trading as it doesn’t account for tariffs, most of which were imposed in May.
US equities had a banner session yesterday following Trump’s retreat on tariffs. The NASDAQ Composite surged 4.36% and the S&P 500 rallied 3.26%. The euphoria was far more muted in Asia where Japan’s Topix edged up 1.10% and Australia’s ASX 200 only gained 0.43%. It was worse for Hong Kong’s Hang Seng, which tumbled 1.87%.
European stock markets are treading water near flat levels. The UK FTSE 100 index leads the pack with a gain of 0.17%. S&P 500 futures dipped by 0.21% while Gold (XAUUSD) claws back some of its earlier losses, trading at 3251.96. The US 10-year Treasury yield is stable at 4.458%, and the US dollar index (USDX) is consolidating gains around 101.57.
EURUSD traded in a 1.1087–1.1125 range, while ignoring a somewhat upbeat German ZEW report for May. Comments from US Treasury Secretary Scott Bessent, highlighting the EU’s internal divisions—such as differing priorities between Italy and France—suggest tough negotiations ahead and dampened euro sentiment.
GBPUSD drifted in a 1.3170-1.3221 band and is attempting a modest rebound after Tuesday’s plunge. Weaker than expected UK employment data showed the jobless rate ticking up to 4.5% from 4.4%. The negative sentiment was tempered by rising wages outpacing inflation.
USDJPY was steady in a 147.65–148.47 range holding near the midpoint as safe-haven flows eased slightly. The pair is supported for now but remains susceptible to shifts in broader US dollar sentiment. Japanese GDP data due Friday could inject fresh direction.
AUDUSD traded in a 0.6362–0.6420 range, gaining ground as optimism over the temporary US-China tariff truce lifted sentiment. The move helped unwind part of yesterday’s losses and supported the Australian dollar during the Asian session.