Canadian gains on pause as USD stabilizes

Key Movers

The USD Index (DXY) is starting the day back over 112 as equities futures and commodities are pointing to a lower open in the North American trading session.  Yesterday’s Purchasing Manager Index mix came in lower than expected pointing to lower business confidence.  Today, we will see the consumer side with the CB Consumer Confidence release later this morning.  The most impactful data this week is likely to be Friday’s PCE inflation release as markets will be looking for data that backs up a slowing of rates hikes out of the Fed.

The pound has maintained gains this morning with the official appointment of Rishi Sunak as Prime Minister.  Markets are awaiting the appointment of new cabinet and indication of the direction the new government wants to take to fight inflation.

In the Eurozone, there was some positivity in European trading as the Business Climate data from Germany came out stronger than expected at 84.3.  This shows that business owners in Europe’s biggest economy have a brighter outlook for the next 6 months.  Many euro traders remain focused on the interest rate announcement from the ECB on Thursday.

Asian markets are seeing the JPY regain some ground against the American dollar coming off of the highs of 150 as the Government of Japan once more considers further intervention on behalf of the Yen.  Elsewhere, the CNY started the week lower to the highest level since 2008.  This is likely reaction to the release of third quarter growth of 3.9% which disappointed some.