The Morning Update

The USD is steady, oil prices advance, equity markets are mixed, and US yields advance as risk sentiment eases. The U.S. dollar is little changed in early trading as investors await the release of the ISM Services PMI, Federal Reserve Governor Christopher Waller's remarks, and this week's Fed meeting minutes for further policy guidance. Market sentiment remains cautious following reports of a commercial vessel being attacked in the Strait of Hormuz, renewing geopolitical concerns, while investors also look ahead to the start of the U.S. second-quarter earnings season. Global equity markets are mostly lower in early trading as renewed weakness in technology shares outweighs Samsung's record quarterly profit, with investors questioning whether the AI-driven rally can be sustained. U.S. futures are weaker, led by the Nasdaq, while European markets are broadly steady and Asian equities declined amid selling across semiconductor stocks. Elsewhere, oil prices are trading higher after attacks on commercial shipping in the Strait of Hormuz renewed supply concerns. Gold and Bitcoin are retreating as higher Treasury yields and profit-taking weigh on sentiment. Today sees a relatively light economic calendar, with focus on the US ADP Employment Change, CAD Ivey PMI and BoE Mann & Feds's Bowman comments to help guide intraday currency markets.

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News Headlines. The Eu to delay pre-authorized travel system after border chaos. German business leaders warn Merz more is needed to prevent 'lost decade'. Samsung shares tumble 10% despite record quarterly profit from AI boom. Canada tells the UAE it is not ready for its C$70bn investment. China gives its investors more access to bonds in Hong Kong. The Bank of England plans to ease bank capital rule. Japanese wages continue to rise, boosting BoJ normalization policy. Canada orders 12 submarines from Germany in largest defence deal of its kind. Oil prices rise after report of Iranian attack on commercial ships in the Strait of Hormuz.

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In currency markets. Against the U.S. dollar, major currencies are easing in early trading as higher Treasury yields and expectations that the Federal Reserve will keep interest rates higher for longer support the greenback. Investors are also adopting a more cautious stance ahead of the release of the Fed meeting minutes and key U.S. economic data later this week.

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In commodity markets. Oil +0.96% | Nat Gas +0.96% | Gold -0.50% | Silver -1.36% | Copper +0.18% | Palladium +0.74% | Coffee -3.27% | Cocoa +0.56% | Soybeans +0.14%

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CAD is little changed against the U.S. dollar in early trading, with the pair holding above 1.4200 as a firmer greenback offsets support from higher oil prices. Investors will focus on today's Ivey PMI, where economists expect a reading of 59.1, up from 58.2 previously, signalling continued expansion in Canadian business activity and providing an important gauge of domestic economic momentum ahead of Friday's employment report.

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EURCAD is holding steady, straddling the 1.6250 level in early trading as a softer Canadian dollar offsets a modestly weaker euro against the U.S. dollar. Investors will look to today's Canadian Ivey PMI for further direction, while the absence of major Eurozone data is keeping the pair confined to a relatively narrow range.

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EUR is little changed against the U.S. dollar in early trading, with EUR/USD holding near 1.1430 as investors await fresh policy signals from both the European Central Bank and the Federal Reserve. With no major Eurozone data due today, market attention is focused on U.S. trade data, Federal Reserve speakers and this week's Fed meeting minutes, leaving the euro trading in a relatively narrow range.

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GBPEUR is flat in early trading, above 1.1700 after rallying to one-year highs as the euro remains under pressure despite stronger-than-expected German industrial production. Expectations that the European Central Bank is nearing the end of its tightening cycle continue to weigh on the single currency, while the Bank of England is expected to keep policy unchanged in the near term.

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GBP slipped slightly against the U.S. dollar in early trading, easing from recent highs as investors adopt a more cautious stance amid renewed geopolitical tensions and a modestly firmer greenback. Later today, markets will monitor the Bank of England's Financial Policy Committee announcements, along with U.S. trade data and speeches from Federal Reserve Governors Michelle Bowman and Christopher Waller for fresh direction.

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