BOC: September Meeting Deliberations Suggest Some Caution On Future Easing
Oct-01 17:44
The deliberations of the September Bank of Canada meeting (link: https://www.bankofcanada.ca/2025/10...
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COMMODITIES: Crude Rallies, Precious Metals Extend Gains
Sep-01 17:20
- Crude is trading higher on Monday, with Russian supply concerns and Indian buying in focus. Attention is also turning to the next OPEC+ meeting, scheduled for Sept 7.
- WTI Oct 25 is up by 1.1% at $64.7/bbl.
- Overall, Russian crude exports face pressure, running at a four-week low. However, Indian demand remains firm despite US threats and tariffs.
- From a technical perspective, a bear cycle in WTI futures remains intact and the latest recovery appears corrective.
- Key short-term resistance has been defined at $69.36, the Jul 30 high. Clearance of this level would cancel a bear theme. Initial resistance to watch is $66.56, the Aug 4 high.
- Meanwhile, spot gold has risen by 0.8% today to $3,476/oz, amid ongoing questions surrounding Fed independence and focus on the potential for a round of Fed easing.
- Initial US dollar weakness helped the yellow metal rise to a high of $3,490 earlier in the session, before bullion moved away from best levels amid a stabilisation in the greenback.
- The primary trend direction for gold remains up, and sights are on key resistance and the bull trigger at $3,500.1, the Apr 22 all-time high. Clearance of this hurdle would confirm a resumption of the uptrend and open $3,547.9, a Fibonacci projection.
- Elsewhere, silver has outperformed today, with the precious metal up by 2.4% at $40.68/oz.
- Trend signals in silver remain bullish, with sights on $41.064 next, a Fibonacci projection.
US TSYS: Mildly Cheaper At The Labor Day Early Close
Sep-01 17:07
- Treasury futures dealt mildly cheaper at the early close for Labor Day after an unsurprisingly quiet session. There was no cash trading due to the holiday.
- Sell-off cues were taken from some mild weakness in EGBs on supply grounds.
- TYZ5 at 112-11+ (-04+) on cumulative volumes of 208k. An earlier low of 112-09+ saw lows since Aug 27, but as opposed to some support clearance in EGBs it didn’t come close to troubling support at 111-31 (20-day EMA).
- Technicals suggest the trend structure remains bullish with resistance at 112-20+ (Aug 28 high).
- At the front end, Fed Funds futures were mixed for near-term meetings, with Sept cut pricing building very slightly to 22.5bp priced vs a 0.5bp trimming for Dec with a cumulative 55.5bp.
- SOFR futures implied yields were up to 2.5bp higher from Friday’s close, with increases led by the SFRH7 which continues to see a terminal yield of sub-3% at 2.97% for ~135bp of cuts from current levels.
- President Trump’s Truth Social activity has also been light so far today, saying India’s offer to cut tariff rates to zero is getting late, hinting at pushes to tackle crime in Chicago, LA, NY and Baltimore and pushing “Pfizer and others” to show Covid drug success.
- US Tsy Sec Bessent meanwhile suggests that Trump may declare a “national housing emergency” this fall to address rising house prices, something last seen in 2008.
- Tomorrow is headlined by ISM mfg for August before labor data starts to take over in the usual build-up to the nonfarm payrolls report for August on Friday.
FOREX: USD Index Tilts Modestly Lower, GBPJPY Rises 0.4%
Sep-01 16:59
- Early price action on Monday saw the USD index fall to a fresh one-month low of 97.54, briefly printing below the post Jackson Hole lows from Sep 22. This continues the theme from late last week where broadly resilient major equity benchmarks have allowed risk sentiment to stabilise, keeping the short-term path of least resistance lower for the US dollar.
- As expected, currency market momentum was lacking, owing to the US Labor Day holiday and the associated dampened liquidity and volumes. This helped the dollar off its worst levels as we approach the APAC crossover.
- Scandinavian FX performed strongly to start the week, clearly outperforming across the G10. USDSEK (-0.67) traded down to a fresh 3-year low of 9.3796 ahead of Thursday’s key inflation data. In similar vein, USDNOK (-0.66%) exhibited similar weakness but remains well shy of the 9.86 lows posted in June.
- Among the majors, GBPUSD rose 0.3% to edge back towards 1.3550. The moves come amid UK Prime Minister Keir Starmer announcing changes to his team to reset his government and give him more influence over economic policy. This helped propel GBPJPY back to 199.50, approaching a key psychological barrier of 200, which has provided pivotal significance over the last year.
- EURUSD had an early leg higher to 1.1736 but remained short of initial resistance at 1.1743 (Sep 22 high). Since then, the pair has edged back to the 1.17 mark as markets await the plethora of US data due this week, which culminates with the US employment report Friday. Key EURUSD resistance and the bull trigger remain at 1.1829, the Jul 1 high. Eurozone inflation data is scheduled tomorrow.
- The Japanese yen bucks the trend very slightly, weaker over the session and USDJPY back at 147.25. Overall, a bear threat in USDJPY remains present and the short-term bear trigger lies at 146.21, the Aug 14 low. US ISM manufacturing PMI data is due Tuesday.
