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CAD

The loonie and the leavers

On October 19th, Albertans will answer a question no province outside Quebec has ever formally put to its voters: whether to begin the legal process toward a binding referendum on leaving Canada. The wording is deliberately indirect—this is a vote about whether to hold a future vote—and it sits alongside nine other ballot questions on immigration and the constitution. But its symbolism is potent. Under Premier Danielle Smith, a separatist impulse long confined to the fringes of her United Conservative Party has reached the mainstream, potentially impacting the broader Canadian economy and the loonie’s value. Prime Minister Mark Carney has...

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Middle East uncertainties keep markets guessing

Good morning. Oil prices are climbing and the dollar is trimming its losses against major peers as hopes for a near-term diplomatic resolution to reopen the Strait of Hormuz fade amid a fresh round of military escalation in the region. The US military struck targets in southern Iran and sank two Islamic Revolutionary Guard Corps vessels last night in what American officials described as defensive operations, while Israel simultaneously launched air strikes against Hezbollah in southern Lebanon. The reversal follows a long weekend that had brought a string of optimistic headlines, easing pressure across asset classes. President Trump announced on...

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Unemployment & the RBA

• Market swings. Conflicting US/Iran reports generated volatility. US equities a bit higher. USD whipped around. Local/offshore factors push/pulled the AUD.• AU jobs. Weak jobs report in April. Employment fell. Unemployment at multi-year high. RBA rate hike expectations trimmed. Domestic headwinds growing. Global Trends The ‘will they, won’t they’ situation regarding a US/Iran peace deal continues to generate bursts of market volatility. Risk sentiment, and bellwether indicators like oil prices, swung around overnight on the back of conflicting reports. One the one hand the latest 14-point framework was reported by Iranian media as having “narrowed the gap” and US Secretary...

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Iran hopes lift risk appetite, but conviction remains low

Good morning. In subdued trading, oil prices are extending their decline, equities are advancing, Treasury yields are easing from recent highs, and currency markets remain dormant after President Trump said talks with Iran are in the “final stages”—leaving many investors awaiting something more conclusive. Trump warned that Washington could resume strikes within days if peace talks fail to advance, while Tehran cautioned that any renewed aggression would trigger a conflict extending “beyond the region”. Although a number of oil tankers have crossed after coordinating with Iranian authorities, the Strait of Hormuz remains largely closed to international shipping, sustaining history’s biggest...

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The world’s most crowded trade

This afternoon’s first-quarter results from Nvidia are unlikely to cool the artificial intelligence frenzy. In nominal terms, net income almost certainly grew to a level no public company has ever surpassed. But the chipmaker’s dazzling numbers—and the reaction felt across asset classes—will also illuminate a risk that ought to concern investors and businesses far beyond Silicon Valley: the sheer concentration of global wealth in American technology stocks, and the exposure of the rest of the world to any stumble. Start with scale. American equities are now worth—on paper, at least—$76trn, an amount approaching 70% of world output*. A decade ago...

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