CANADA: Liberals To Lead Next Gov't, Conservative Leader Set To Lose Seat
Prime Minister Mark Carney's centre-left Liberal Party has secured a fourth consecutive term in office following an election campaign that has seen one of the most notable changes in fortune in recent Western political history. The Liberals look set to have secured 168 out of 343 seats, an increase of eight from 2021 and four short of an overall majority. Despite the most recent polling and betting market probabilities showing a Liberal majority as the most likely outcome, even retaining top spot will be viewed as a remarkable turnaround for a party that stood ~20-25% behind its centre-right Conservative party (CPC) opponents at the start of the year.
- For the Liberals, the result means forming either a coalition or a confidence and supply agreement. Their options are the regionalist Bloc Quebecois - down nine seats to 23 - or the left-wing New Democratic Party (NDP). The NDP suffered its worst election on record, falling from 25 seats in 2021 to just seven, with party leader Jagmeet Singh losing his riding in Vancouver. The NDP also loses 'official party status', reducing its funding for party research offices and speaking allotment at Question Time.
- For the Conservatives, the election will be viewed as disastrous despite having won the highest share of the vote in its history (41.4%). Indeed, the party's vote share is around the same as it polled at the start of the year when a CPC majority looked all-but-inevitable. However, the collapse of the Bloc/NDP/Green vote, which swung almost wholly behind the Liberals, saw the Conservatives fall short under Canada's first-past-the-post system. Indeed, adding to the ignominy, Conservative leader Pierre Poilievre looks set to lose his Carleton riding on the outskirts of Ottawa.
Chart 1. Partial Federal Election Results, Seats
Source: CBC, MNI
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
USDCAD TECHS: Bullish Outlook
- RES 4: 1.4700 Round number resistance
- RES 3: 1.4641 76.4% retracement of the Feb 3 - 14 bear leg
- RES 2: 1.4452/4543 High Mar 13 / 4 and a bull trigger
- RES 1: 1.4402 High Mar 20
- PRICE: 1.4292 @ 16:50 GMT Mar 28
- SUP 1: 1.4235 Low Mar 26 and a key near-term support
- SUP 2: 1.4151/4107 Low Feb 14 / 50.0% of Sep 25 - Feb 3 bull run
- SUP 3: 1.4011 Low Dec 5 ‘24
- SUP 4: 1.3944 61.8% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
USDCAD traded through support at 1.4242 on Wednesday but has recovered. A return lower and clearance of this level would undermine the bull theme and instead highlight potential for a test of 1.4151, the Feb 14 low and a bear trigger. Moving average studies continue to highlight a dominant uptrend. A reversal higher would refocus attention on the bull trigger at 1.4543, the Mar 4 high. First resistance is 1.4402, the Mar 20 high.
US FISCAL: Debt Limit "Extraordinary Measures" Pick Up, But Cash Dipping Pre-Tax
Treasury data shows that there were $207B of "extraordinary measures" available to circumvent hitting the debt limit as of Wednesday Mar 26.
- That's the most since Jan 27th and up from $163B a week earlier, from a total $376B available.
- However, Treasury cash in the TGA fell to $316B as of the 26th (and was down to $280B on Thursday), meaning there were a combined $523B of resources available to avert the debt limit, the lowest since the impasse began in January (and half of the starting amount of just over $1T).
- The next couple of weeks will be very important for Treasury, as they represent the biggest tax take of the year. The Congressional Budget Office reported this week that per its estimates "if the debt limit [$36.1T] remains unchanged, the government's ability to borrow using extraordinary measures will probably be exhausted in August or September 2025." Treasury wrote to Congress this month that they would be able to provide an update on the x-date in the first half of May, after the conclusion of tax season.
AUDUSD TECHS: Remains Above Support
- RES 4: 0.6429 High Dec 12 ‘24
- RES 3: 0.6414 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg
- RES 2: 0.6409 High Feb 21 and a bull trigger
- RES 1: 0.6391 High Mar 17 / 18
- PRICE: 0.6291 @ 16:46 GMT Mar 28
- SUP 1: 0.6258 Low Mar 21
- SUP 2: 0.6187 Low Feb 4
- SUP 3: 0.6171/6088 Low Feb 4 / 3 and a key support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
AUDUSD is unchanged. A short-term bull theme is intact and the latest move down appears corrective. Key short-term support to watch is 0.6187, the Mar 4 low. Clearance of this level would reinstate a bear threat. First support is at 0.6258, the Mar 21 low. A stronger recovery would refocus attention on 0.6409, the Feb 21 high. Clearance of this hurdle would strengthen the bull cycle and resume the uptrend that started Feb 3.
