Monday October 16th, 2023

The USD and oil prices are moving lower, equity markets are up, while US yields trends higher. Despite the move lower, the USD remains near its one week high as the market continues to move to a safe haven currency. US retails sales figures to be released tomorrow. Israel’s bombardments have intensified overnight ahead of a possible ground invasion. Humanitarian aid is being held in Egypt as they await a deal that would allow for a safe delivery and the evacuation of some foreign passport holder through the Rafah border crossing.

In other news.? Filling the position of House Speaker seems far from being resolved as one of senior Republican house member believes there are roughly 40 no votes. Due to the GOP thin majority in the house, Jim Jordan, the nominee for the position, can’t lose more than 4 votes. Russian foreign minister set to visit North Korea days after the US claimed Pyongyang delivered munition and military equipment to Russia. Four Ukrainian children will be reunited with their family after Qatar brokered a deal between Russia and Ukraine.

In currency news. NZ elected a new PM changing from a liberal government to a conservative one. Polish ruling party appeared to have lost its majority in what could lead to the opposition parties to seizing power in what is considered a huge political shift (PLN +0.75%). As we start the week, the CNY, THB and MYR are down own +/-0.15%, NAD and AUD up 0.5%, while ZAR and MXN are up over 0.6%.

In commodity news.??Oil prices remains above $90 as market participants wait to see if the Israel-Hamas war will draw other countries. Oil futures are flat to start the day, gold is off 0.6%, while Natgas is down 3%, Copper up 0.5%, wheat and soybean are up 1.25% and up 0.3% respectively.

CAD – The Loonie started the week a little stronger as oil price kept most of Friday’s 6% gains. On the economic data front, Bank of Canada’s business outlook to be announced later this morning while CPI will be released on Tuesday.

EURCAD – remains stable to start the week settling near early October levels.

EUR – The Euro starts the week on a positive note against the USD rebounding off last week’s low. Quiet week on the economic data front in Euroland.

GBPEUR – The cross continue is move lower finding support near early October level.

GBP – BoE’s chief economist said that they should not consider the fight against inflation to be over because price growth has slowed and noted that market expectation for future inflation shows that the BoE cannot be complacent.