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CAD

Onwards & upwards

• Upbeat tone. Markets continue to factor in US Fed rate cuts. US bond yields fell further & USD weakened. AUD approaching top of its year-to-date range.• US jobs. Benchmark revisions to US payrolls due tonight. Negative revisions could keep USD on backfoot, a tailwind for other currencies.• Inflation pulse. US producer & consumer prices due later this week. More signs of tariff driven inflation may generate a burst of market volatility. Global Trends News wise it has been a quiet start to the week. The lack of fresh information has seen markets reinforce their US Fed interest rate cut...

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Markets Hunker Down Ahead of Inflation Reports

Currency markets are back in consolidation mode as investors keep an eye on international developments and await inflation data that could alter US monetary policy expectations across the front end of the curve. Ten-year Treasury yields are holding firm, equity futures are setting up for gains at the North American open, and the dollar is trading slightly lower against its major peers after a relatively-subdued reaction to Friday’s data. Markets are assigning better than 100-percent odds to a rate cut at next week’s Federal Reserve’s meeting after Friday’s non-farm payrolls report delivered incontrovertible evidence of a slowdown in US labour...

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US stall speed

• US jobs. Weaker than forecast US jobs report. US Fed rate cut expectations increase. Lower US bond yields weigh on USD. AUD & NZD firmer.• Fed policy. Step down in employment points to a series of rate cuts by US Fed. Markets toying with the idea of a 50bp move later this month.• Key Events. In the US, revisions to non-farm payrolls in focus this week, as are producer prices & CPI inflation. ECB also meets. No change expected. Global Trends The state of the US jobs market was in the spotlight on Friday and the data (once again)...

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US Job Market Hits Wall, Raising Fed Easing Expectations

The US job creation engine slowed further last month, reinforcing market expectations for at least two rate cuts from the Federal Reserve in the remainder of the year. According to data just released by the Bureau of Labor Statistics, just 22,000 jobs were added in August – representing an undershoot relative to the 75,000-consensus forecast – and the unemployment rate held at 4.3 percent. The previous month was revised up to a still-low 79,000 from the 73,000 previously estimated, and average hourly earnings climbed 3.7 percent year-over-year, slowing from the 3.8-pace set in the prior month. The manufacturing sector—purportedly the...

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Bond Market Turmoil Eases As Labour Markets Slow

A fragile sense of calm is returning to financial markets this morning as investors revert to betting on an aggressive easing cycle from the Federal Reserve. The yield on the 30-year US Treasury is back down to 4.88 percent after flirting with the 5-percent threshold, long-dated bonds in both the UK and Japan are coming off levels last hit in the nineties, and spreads within the euro area are contracting, pointing to an easing in funding concerns. North American equity futures are pointing to a mildly-positive open, and the dollar is holding steady against its major counterparts ahead of tomorrow’s...

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