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On January 12th, the Israeli Prime Ministers Office announced via social media that Prime Minister Benjamin Netanyahu stated at the start of his weekly government meeting that Israel is closely monitoring the situation in Iran. That afternoon, Netanyahu convened consultations with his senior advisors and several ministers on security issues. The Israeli security cabinet is scheduled to hold a plenary meeting on the 13th.January 12th - Bond investors overall bets on the Federal Reserves policy path and the direction of the US Treasury market in 2026 appear to have room for further expansion. Last Fridays non-farm payroll report showed weaker-than-expected job growth, maintaining market expectations for further Fed rate cuts. This result confirms market expectations that short-term Treasury bonds (most sensitive to monetary policy) will outperform long-term Treasury bonds this year, widening the yield spread between the two. This strategy, known as the "steepening trade," was one of the most popular bond trades for most of last year and continues to work at the start of 2026. Pramod Atrouli, fixed-income portfolio manager at Capital Group, stated, "There are many scenarios over the next 12 to 24 months that are very favorable for the yield curve steepening trade." An analysis of 25 of the largest actively managed core bond funds by JPMorgan shows that, historically, these funds still have a high exposure to this trade.According to Iranian state media, Iran summoned the British ambassador after protesters tore down the Iranian flag from the Iranian embassy building in London.Market news: Home Depot and Google Cloud have jointly launched the Agentic AI tool to help customers and employees transform projects from "how to do it" to "completed".Domestic News: 1. The "Tianma-1000" unmanned transport aircraft successfully completed its maiden flight. 2. Shanxi Province issued consumption subsidies for home appliances and digital smart products in 2026. 3. Hong Kongs new budget will be announced on February 25. 4. China Securities Regulatory Commission (CSRC): Focusing on cracking down on major, malicious, and key illegal activities, and severely punishing all kinds of malicious illegal activities. 5. Chinese Embassy: Due to scheduling conflicts, Wang Yis planned visit to Somalia on January 9 has been postponed. 6. Wang Yi held a telephone conversation with the Somali Foreign Minister: Opposing Somalilands collusion with the Taiwan authorities to seek independence. 7. National Business Work Conference: In 2026, efforts will be accelerated to cultivate new growth points in service consumption and optimize the implementation of the trade-in policy for consumer goods. International News: 1. A curfew has been imposed in Narathiwat Province in southern Thailand. 2. Israeli forces are reportedly planning a new round of attacks on the Gaza Strip. 3. British officials: The possibility of Britain deploying troops to Greenland cannot be ruled out. 4. South Korean Presidential Office: Will investigate the truth behind North Koreas claim of a "drone intrusion" and release the results promptly. 5. Iranian President: The government endorses peaceful protests and is willing to meet with protest groups. 6. Danish Parliament Chief: It would be "foolish" to go to war over Greenland. 7. Israel demands the EU designate Irans Islamic Revolutionary Guard Corps as a "terrorist organization." 8. US Media: Trump received a briefing on options for striking Iran but has not yet made a final decision; the government is considering multiple options for intervention in Iran. 9. Trump again pressures Cuba, threatening that if Cuba does not reach an agreement soon, it will face a situation of "zero oil and zero funds" flowing into Cuba. 10. Iranian Parliament Speaker warns Trump that any attack would lead Iran to consider Israel and US bases in the region as "legitimate targets" and strike them.

As investors anticipate BOC and US Inflation, USD/CAD falls toward 1.2900

Jul 11, 2022 11:32

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The USD/CAD pair is trading below the important support level of 1.2960 as investors support the Canadian dollar against the U.S. dollar on the strength of positive Canadian unemployment statistics. On a larger scale, the pair has depreciated progressively after retesting the key resistance level of 1.3083 on Wednesday.

 

The unemployment rate in Canada came in at 4.9%, below both estimates and the previous announcement of 5.1%. This has encouraged the Bank of Canada (BOC) to raise its interest rates on Wednesday by a reasonable amount. According to market consensus, the BOC may issue a 75-basis-point rate rise (bps). The occurrence of the same will increase the official interest rate to 2.25 percent.

 

Tiff Macklem, the governor of the Bank of Canada, is obligated to announce a significant interest rate increase due to the escalating inflationary pressures in the Canadian economy. May's inflation rate in Canada was 7.7 percent, a significant increase from the 6.8 percent figure reported in April.

 

On the dollar front, the US dollar index (DXY) has seen a little recovery at the opening. The DXY will stay on edge until Wednesday, when the US Consumer Price Index (CPI) will be released. The preliminary estimate for US inflation is 8.7%, which is 10 basis points (bps) higher than the previous estimate of 8.6%. A higher inflation reading will increase the likelihood that the Federal Reserve (Fed) would adopt an extremely hawkish posture at its monetary policy meeting in July.