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On September 20th, according to Russian sources, Moscow Mayor Sergei Sobyanin announced on social media that over 150 Ukrainian drones had attacked Moscow and its surrounding areas since the early hours of the morning, with most being shot down by Russian air defense systems. Furthermore, according to the Kyiv Military Authority, air raid sirens were issued in the early hours of the 20th in Kyiv, the Ukrainian capital, due to the threat of missiles and drones.According to TASS: The mayor of Moscow said that facilities at the Moscow oil refinery have been damaged by ongoing drone attacks.On September 20th, at the 2026 World Manufacturing Convention, Changxin Technology announced the official mass production of its fifth-generation technology platform. According to reports, Changxin Technology has achieved a 11.95nm half-pitch for the active area of the memory array, a 45:1 aspect ratio for the memory capacitor, and a core energy area height reduced to 6762nm. Simultaneously, the fifth-generation process platform has significantly improved memory density, increasing the output per wafer by more than 50% compared to the previous generation platform under the same conditions. 24GB LPDDR5X products built on this platform have entered mass production and are widely used in mainstream flagship smartphones from Chinese manufacturers.September 20th - According to the China Association of Automobile Manufacturers (CAAM), from January to August, the top ten passenger car manufacturers sold a total of 4.014 million vehicles, accounting for 67.9% of total passenger car sales. Among these ten companies, SAIC Motor and Tesla saw varying degrees of sales growth compared to the same period last year, while the sales of the other companies all declined to varying degrees.On September 20th, Orient Securities Research stated that the LPR (Loan Prime Rate) for both maturities remained unchanged in September, largely in line with market expectations. The stable LPR since the beginning of the year reflects the fact that first-half GDP growth reached 4.7%, falling within the annual economic growth target range of 4.5% to 5.0%, with accelerated development in new productivity sectors, represented by high-tech manufacturing. This means that although domestic investment and consumption have weakened since the second quarter, and economic growth momentum has declined somewhat, macroeconomic policies have maintained strong resolve, and monetary policy remains in an observation period. This is the fundamental reason why the LPR remained unchanged in September. We predict that the central bank may implement policy-driven interest rate cuts later, which will lead to a follow-up reduction in the LPR. The Politburo meeting on July 30th emphasized the need to "fully leverage the effectiveness of existing policies, promptly plan and introduce practical and effective incremental policies, and increase counter-cyclical adjustments," and required "comprehensive use and timely adjustment of monetary policy tools." Considering the economic and financial situation and price trends, the possibility of a new round of incremental policies cannot be ruled out.

As Oil Bears Take a Break and Focus on the Federal Reserve and Geopolitics, USD / CAD Reverses from a Multi-Day High

Alina Haynes

Feb 23, 2023 14:57

USD:CAD.png 

 

As it reverses from a seven-week high marked the day before on Thursday morning, USD/CAD accepts offers to reestablish the intraday low near 1.3540. Consequently, the Loonie pair suffers its first daily loss in three days, amidst market consolidation and cautious optimism.

 

Nevertheless, the absence of Japanese traders due to the Tokyo holiday has joined the previous decline in US Treasury bond yields and a decline in US inflation expectations to influence the most recent USD/CAD exchange rate. The 10-year and 5-year breakeven inflation rates from the Federal Reserve Bank of St. Louis (FRED) indicate a decline in US inflation expectations by falling from the multi-day high.

 

On a similar trajectory, Canada's primary export commodity, WTI petroleum oil, may experience a reversal. The black gold fell to a 13-day low after losing nearly 3.0% the previous day due to lackluster US inventories and a strong US Dollar. However, as of press time, the energy benchmark has posted modest gains and is trading near $74,00.

 

Despite recent market consolidation, USD / CAD buyers remain optimistic due to hawkish Federal Reserve (Fed) and geopolitical concerns.

 

In terms of geopolitics, US President Joe Biden believes that his Russian counterpart is incapable of using nuclear weapons by renouncing an international treaty. The most recent round of negotiations between the West and China has exacerbated the Ukraine-Russia conflict, which has yet to dispel the concerns surrounding it. The Wall Street Journal (WSJ) reported recently that the United States is considering releasing intelligence on China's prospective arms transfer to Russia. Previously, China-Russia relations appeared to have exacerbated geopolitical tensions, as the United States strongly condemned such actions and favored a surge towards risk aversion, which favored the US Dollar.

 

In a separate section of the most recent Federal Open Market Committee (FOMC) Monetary Policy Meeting Minutes, all participants agreed that additional rate increases are necessary to achieve the inflation target, while also favoring further Fed balance sheet reductions. James Bullard, president of the Federal Reserve Bank of St. Louis, told Reuters that the Fed will need to raise interest rates above 5% to combat inflation. The policymaker also stated that he believes there is a good possibility they will be able to beat inflation this year without causing a recession. In addition, according to Reuters, John Williams, president of the Federal Reserve Bank of New York, emphasized the concerns supporting the Fed's higher interest rates by stating, "Fed is utterly committed to getting inflation back to 2%."

 

US Treasury bond yields are inactive after retreating from a multi-day high, while Wall Street closed neutral and the S&P 500 Futures are modestly bid as of late.

 

The second estimates of the US Personal Consumption Expenditures (PCE) data for the fourth quarter (Q4) and the preliminary readings of the US Q4 Gross Domestic Product (GDP) will be crucial for providing USD / CAD traders with new information in the near future.


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