EU CREDIT UPDATE: €IG Primary Tracker

Oil initially traded to fresh session highs after U.S. President Trump’s latest social media posts threatening Iran (detailed in recent bullets), before moving back from best levels.

• While Trump has amped up the rhetoric, the substance remains largely the same; the U.S. is urging Iran to negotiate a deal while threatening military action if it does not come to the table, helping the lack of topside follow through on the back of the headlines.
• Brent & WTI ~$0.50 higher on the day, with resistance points at $68.58 and $64.09 untouched and the bullish technical theme intact across the major crude benchmarks.

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• Amid the broad-based selloff for the dollar yesterday, and the sharp extension following Trump’s unsurprising comments, USDCAD has slipped below 1.36 and is currently operating within a cluster of support between 1.3540-75, a collection of lows from mid-2025.
• Despite the 2.5% gains for the Canadian dollar from the January lows, there has been a degree of relative underperformance, likely stemming from the US administration’s renewed tariff threats, stating that Canada could face 100% tariffs from the US if it enters a free-trade agreement with China and becomes a gateway for artificially cheap goods into the US supply chain.
• Given the key support zone for USDCAD and the fact the trend has entered oversold territory, from a risk reward perspective, a corrective bounce may look attractive at current levels and as we approach the Bank of Canada and Fed decisions later today. The BOC is overwhelmingly expected by both markets and analysts to maintain its overnight rate at 2.25% today.
• CIBC suspect that the risks to the FOMC is a more hawkish than anticipated hold, which could support a near-term dollar bounce. Furthermore, CIBC believe today provides ample opportunity to go long USDCAD when spot is at the lower bound of its 12m range. They suspect the BOC has more reason to remain cautious given elevated business uncertainty in the coming months around the USMCA sunset clause. CIBC are looking for USDCAD to trend higher in the coming weeks, with the next resistance level around the 1.38 handle.