FOREX: Updated CME FX Roll pace

• March building permits -4.1% to CAD12.9B, StatsCan says Wed.  
• Decline driven by non-residential sector -15% to CAD4.2B mainly due to a significant drop in commercial with Ontario posting more than half the decrease.
• Residential permits +2% to CAD8.7B on multi-family units, while single-family units -5.3%.
• Permits +15% YOY.
• On a quarterly basis, building permits +2.9% to CAD39.1B, fifth straight gain. Multi-family housing +9.6% to record high CAD17.3 billion, led by Vancouver projects.

Chancellor Merz concluded his inaugural government declaration, overall remaining close to his CDU/CSU/SPD coalition agreement. Generally, he highlighted making competitiveness a key parameter in economic policy, preserving jobs in industrial manufacturing, and budget consolidation (increasing efficiency of measures) as key goals for his administration. Concrete measures announced include the below:

• Accelerated depreciation on private investment: 30% of acquisition costs deductible per year over 3 years, starting to reduce enterprise taxes in 2028
• Imposition of a 12-year infrastructure package
• New free trade initiative proposed in the EU (mentioning MERCOSUR, US)
• Enabling enterprise formation within 24 hours
• Reduction of reporting obligations for enterprises
• Introduction of an 'early start-retirement pension' (Frühstartrente; from 2026, children from age 6 receive E10/month in an individual, publically funded and privately managed retirement savings account. Fiscal costs costs would amount to ca. E1bln/year)
• CO2 pricing as a core component of climate policy, revenues should not flow into the budget but be distributed Sticking to European climate targets
• Maximum weekly working hours instead of daily maximum to increase labour flexibility
• Government believes the E15/h minimum wage by 2026 is achievable and desirable, but will not enshrine the goal in law - minimum wage commission remains in place
• "Trusting" the agricultural sector: Relying on voluntary action and personal responsibility of farms (this announcement saw a positive reaction in German chemical equities)
• Prioritizing integrating immigrants into the labor market as quickly as possible
• More collective bargaining in the labour market
• Intensify cooperation with Asian partners (mentioning China, some other APAC countries)
• Deepening cooperation with UK on defence

Next in the German domestic politics calendar will be finance minister's announcement of updated tax estimates tomorrow - Handelsblatt sources flagged this will result in a downward revision following lower GDP forecasts ('GERMANY: German Tax Revenue Estimates To Be Downwardly Revised - HB' - May 13).

Spot gold breaches initial support at $3,202.0, the May 1 low, now 1.7% lower on the session. A clear break of this level would undermine the short-term bullish theme and signal scope for a deeper retracement. This would open $3164.3, 61.8% of the Apr 7 - Apr 22 upleg. Note that the 50-day EMA is at $3164.5 - a key support too.

• There has been a notable ratchet higher in gold futures volumes since NY desks began to filter in today. 2,266 lots traded in Gold futures at 13:36 BST. That's the heaviest volume inside 60 seconds since April 23rd, and has seemingly driven the latest leg lower in spot.
• The moderation in US/China trade tensions has supported global risk sentiment this week, weighing on gold.
• Silver is also softer today, 2% lower on the session at $32.2/oz. A reminder that silver did not participate in the post-Liberation Day rally alongside Gold – seeing price action more similar to US equity futures. However, since April 22 the Gold/Silver ratio has moved away from multi-year highs of 107, currently at 98.8. Initial support is the April 4 low at 97.4.