MACRO ANALYSIS: MNI US Macro Weekly: Risk-Off Before Data Resumes In Earnest

YouGov reports that US President Donald Trump’s support amongst independent voters has plunged to a record low for the President of net -40, amid the fallout from immigration enforcement operations in Minnesota.

• YouGov notes, “The net job approval of -40 among Independents is a steep drop from last week, when Trump's net job approval with the group was -31.” However, the report cautions, “It's too early to say how much this drop reflects a long-term decline in approval among Independents and how much is weekly survey variation.”
• YouGov notes the volatility of recent survey results: "Last week, Trump's net job approval among Republicans fell to +62 from +77 the week before. That was a record low in job approval among Republicans for Trump's second term. But this week Trump has a +72 net job approval among Republicans, suggesting that the magnitude of his decline in last week's poll may have been due in part to normal survey variation.”
• The survey is the latest in a flurry of polls suggesting that voters are responding negatively to the recent newscycle that has included pushback to ICE, an acrimonious Davos summit, and an increase in US military operations abroad.   

Figure 1: Net approval of Donald Trump's job handling from Independents in Trump's first term and his second term

Source: YouGov

The Bank of Canada's January meeting did little to change analysts' expectations for the path forward. Like MNI, most saw a hint of a dovish tilt vs expectations in the meeting communications but not large enough a deviation from the neutral path to warrant a reassessment. In particular analysts pointed out the lack of mention of fiscal stimulus as a potential upside driver of activity/inflation, as well as the projections showing sustained economic slack. 

• Some Canadian institutions' comments, along with their BOC rate views:
• TD (Hold through 2026, hike in 2027): "the policy statement took a more dovish tone by placing more emphasis on heightened uncertainty around the near-term outlook.... There were few attempts to play up domestic strength in the policy statement...The (near) omission of fiscal supports in the January policy statement also struck us as a dovish given the magnitude of new spending in the Federal Budget...Stronger Q3 growth received only a passing mention in the policy statement, while labour market strength was downplayed amid a pullback in BOS hiring intentions. The statement also downplayed the acceleration in headline CPI a consequence of last year's HST pause, while stating that the Bank expects headline to stabilize near 2% going forward... New economic projections in the January Monetary Policy Report added to the dovish tone."
• Desjardins (Hold through 2026. 50bp hikes in 2027): "the federal Budget 2025... was scarcely mentioned in the MPR. The upward adjustment to the government category of real GDP was marginal despite sizeable planned deficits. This likely reflects measures skewed more toward investment than consumption. It could also be because the budget has yet to pass in Parliament ... the Bank left the output gap essentially unchanged from the October MPR, at -1.5% to -0.5%. This contrasts with our estimates and those of many others which show a narrower gap after substantial historical revisions to real GDP, implying less slack in the Canadian economy The Bank looks to have done its best to change as little as possible to support the case for keeping interest rates on hold."
• CIBC (Hold through 2026. 50bp hikes in 2027): "The Bank remains firmly neutral on where things go from here... But if there’s any slight leaning, it’s still toward some concerns on the growth front due to trade uncertainties, and slightly more comfort that underlying inflation is decelerating."
• RBC (Hold through 2026. 100bp hikes in 2027): "Overall, the case for further easing is weak, yet persistent trade uncertainty and gradually moderating inflation are also arguing against a near-term pivot to rate hikes."
• National (50bp hikes in Q4 2026, hold in 2027): "If forced to say whether the statement was hawkish or dovish, we’d lean toward the latter, though. We find the BoC’s growth outlook for 2026 a bit on the soft side and their description of and outlook for inflation is more benign than we anticipated. The BoC leaving its output gap estimate unchanged (rather than estimating less slack) is not totally unexpected, but we thought there was a good chance they’d signal a smaller output gap. You’ll also find an explicit reference to uncertainty and the coming USMCA review in the press release, though this doesn’t come as a surprise. While our assessment leans a bit dovish, it’s marginal."
• BMO (Hold through 2026): "On balance, there is little to move the needle here for markets. The Bank remains cautious amid heightened uncertainty."

• RES 4: 1.4021 1.236 proj of the Nov 4 - Jan 6 - Jan 19 price swing        
• RES 3: 1.3913 High Sep 14 2021 
• RES 2: 1.3889 1.00 proj of the Nov 4 - Jan 6 - Jan 19 price swing  
• RES 1: 1.3868 High Jan 27
• PRICE: 1.3778 @ 17:11 GMT Jan 28
• SUP 1: 1.3726 High Sep 17 2025 
• SUP 2: 1.3664 Low Jan 27
• SUP 3: 1.3568 High Jan 6  
• SUP 4: 1.3513 20-day EMA

A strong uptrend in GBPUSD remains intact and Tuesday’s extension reinforces current conditions. The climb signals scope for a move towards 1.3889 next, a Fibonacci projection. Note that the trend is in an extreme overbought position and this highlights the near-term risk of a pullback that would unwind the overbought reading. Firm support to watch is at the 20-day EMA, at 1.3513.