The USD holds steady, oil prices slip, equity markets are mixed, and US yields ease as Middle East uncertainty persists. The U.S. dollar is flat in early trading as investors digest the latest Federal Reserve minutes and await further economic data. The minutes highlighted differing views among policymakers, with some favouring higher rates if inflation remains persistent, while others see scope for policy easing should price pressures continue to moderate. New York Fed President John Williams reiterated that the Fed remains data dependent and that it is too early to signal the timing of the next interest rate move. Global equity markets are mixed in early trading as investors balance easing geopolitical concerns against growing optimism ahead of the second-quarter earnings season. Technology shares continue to underpin sentiment, with expectations that strong AI-related earnings will support the sector, although investors remain increasingly selective as valuations come under closer scrutiny. Elsewhere, oil prices are little changed but look set to post a weekly gain as Middle East supply risks persist. Gold is easing as safe-haven demand moderates, while Bitcoin is rebounding on improving risk appetite as investors rotate back into higher-risk assets. In focus today: Markets will be watching Canada's unemployment rate, employment change, participation rate and full-time employment data, along with U.S. wholesale inventories, with the releases expected to provide direction for the Canadian dollar and broader currency markets.
News headlines. Warsh picks ex-BoE chief King, and tech boss Andereessen to reform the Fed. Italy expels Russian diplomats suspected of running spy ring. US strikes Iranian railway bridges on route to city of Khamenei's burial. OpenAI and Google sell AI models to blacklisted China groups. At least 10 people die in Spanish wildfire as heatwave grips Europe. HSBC seeks buyers for risky Hong Kong property loans. SK Hynix raises $26.5 billion in biggest foreign debut in the US. The US says Iran talks will continue despite Hormuz skirmishes. The US ambassador to Canada says both sides share blame for strained relations.
In currency markets. Against the U.S. dollar, major currencies are trading within a tight range in early trading, with the Japanese yen the notable outperformer overnight. The yen strengthened on reports that Japan plans to encourage pension funds to increase domestic investment, boosting expectations for capital repatriation, while markets also remain alert to the possibility of official intervention after the currency recently touched multi-decade lows.
In commodity markets. Oil -0.31% | Nat Gas -0.93% | Gold -0.66% | Silver -1.41% | Copper -0.09% | Palladium +1.32% | Coffee -5.87% | Cocoa -3.97% | Soybeans -0.66%
CAD is holding steady against the U.S. dollar in early trading as stronger domestic trade data and easing recession concerns offset softer oil prices. Investors are now focused on today's Canadian employment report, where economists expect employment to increase by around 10,000 jobs while the unemployment rate is forecast to remain unchanged at 6.6%, providing an important gauge of the Bank of Canada's policy outlook.
EURCAD is holding steady in early trading as a broadly stable euro offsets modest support for the Canadian dollar from recent strength in commodity prices. The focus today is firmly on Canada's employment report, with the unemployment rate and jobs data expected to provide the primary driver for intraday direction and shape expectations for the Bank of Canada's next policy move.
EUR continues to stall between 1.1400 and 1.1450 against the U.S. dollar as ongoing uncertainty surrounding the U.S.-Iran conflict keeps investors cautious despite signs that Washington remains committed to a diplomatic solution. While expectations for further ECB rate hikes have eased following softer Eurozone inflation, policymakers continue to stress a meeting-by-meeting approach, leaving markets to balance the ECB's cautious stance against expectations the Federal Reserve could still tighten policy later this year.
GBPEUR is holding firm near one-year highs as the euro remains under pressure following softer inflation data from Germany and France, reinforcing expectations that the European Central Bank will pause at its July meeting. Sterling continues to draw support from Bank of England Chief Economist Huw Pill's comments that UK interest rates are likely to rise before year-end, highlighting the growing policy divergence between the BoE and the ECB.
GBP is edging higher against the U.S. dollar, trading near one-month highs as expectations that the Bank of England may need to raise interest rates again continue to support sterling. Recent comments from BoE Chief Economist Huw Pill reinforced the case for further tightening, while easing UK political uncertainty and improved growth expectations have added to the pound's recent strength, although Middle East developments and broader U.S. dollar sentiment remain key near-term drivers.
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