Wednesday November 8th , 2023

The USD strengthens, equity markets are flat, oil trades lower and us yields are mixed. The USD continues its rebound after last week lower than expected employment release. Fed chairman to hold a speech later today. G7 released a unified statement regarding the Israel-Hamas war condemning Hamas’ attack on Israel and calling for a humanitarian pause.

In other news.?US voters went to the polls yesterday in 37 States to make their choices on everything from Governorships and local referenda. Democrats faired well in these elections, but we are still far away from the 2024 Presidential Elections.

In currency news.?BOJ Ueda signal’s chance of exit from easy policy before real wages rise. After a loss of more than 5% this year, People’s Bank of China governor said they will guard against overshooting adding that the CNY has been stable against a basket of currencies. The Chinese CPI figures are expected to be announced tomorrow. At the start of the day the CNY is off marginally (0.03%), JPY down 0.27%, MYR and TWD down 0.20%. AUD and NZD are off by 0.10%. In the trading currencies, the MXN is off 0.25% while the ZAR if off 0.90%.

In commodity markets.?Oil prices remained under pressure after sliding to their lowest level in more than three months as market focuses on decreasing demand in the US and China. Oil is presently trading down 0.70%, while Nat Gas is flat, Gold is down 0.20%, silver 0.64%, Copper is flat. Agricultural commodities are up with both Wheat and Soybean up over 1%.

CAD continues to be under pressure has it has lost a good portion of the gain obtained after the weaker than expected employment figures. Concerns over oil demand from US and China weighs on the currency. Fed Chairman Powell holding a speech later this morning may offer some clues on the Fed’s future actions.

EURCAD continues to trade in a narrow range as it tries to reach September high.

EUR hedging lower for a third consecutive day. ECB policy maker Makhlouf said that the inflation impact and monetary tightening are becoming visible among borrowers. Some risks are fading while others are emerging – huge uncertainties lie ahead.

GBPEUR?is trading lower for the third straight day while remaining in the middle of last month’s range.

GBP is gradually declining as investors worry about UK’s third quarter economic performance. Recession risk remains as the Middle East could lead to higher energy prices.