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Canadian Trade Minister: Canada and Japan are collaborating on mining projects, including a potential joint reserve.On June 26, a container ship was attacked in the Strait of Hormuz on Friday, prompting some shipowners to reassess their evacuation plans, but traffic in both directions on this crucial waterway continued. Tanker tracking data showed two fully loaded tankers leaving the Persian Gulf, while four empty Very Large Crude Carriers (VLCCs) were sailing off the coast of Oman, along the southern route managed by Oman and coordinated with the United States. Meanwhile, some vessels opted for the northern route on the Iranian side. Administration of the Strait of Hormuz remains a focal point of the US-Iran dispute. The US stated this week that Iran must maintain free passage through the strait if it wants a permanent peace agreement. Secretary of State Rubio warned during a visit to Gulf states that if Iran charges fees, other countries might follow suit, leading to chaos. The US is pressuring Oman, which also borders the strait, not to establish a joint toll system with Iran. Omans stance remains unclear: on Tuesday, it issued a joint statement with Iran stating it would discuss passage management and related costs, but Rubio said on Thursday that Oman assured him it did not support tolls.June 26 - The dollar edged lower as markets lowered their expectations for a Federal Reserve rate hike. Thursdays data showed the personal consumption expenditures price index (PCE) rose 0.4% month-over-month, below economists forecasts of 0.5%. Deutsche Bank analysts said in a report that this "has somewhat dampened the increasingly heated Fed rate hike narrative in recent weeks." They stated that while Fed officials remain cautious about the inflation outlook, there is growing speculation that the Fed may not need to raise rates at all this year.June 26 – The seventh meeting of the Joint Committee on the China-Korea Free Trade Agreement (FTA) was held in Beijing on June 25. Li Chenggang, Vice Minister of Commerce and International Trade Representative, and Yeo Han-koo, Minister for Trade Negotiations of the Ministry of Trade, Industry and Energy of the Republic of Korea, co-chaired the meeting. Both sides reviewed the implementation of the China-Korea FTA, highly praised its contribution to promoting the integration of industrial and supply chains between the two countries and driving economic growth, and conducted in-depth communication on specific issues of concern regarding the implementation of the FTA. The China-Korea FTA officially came into effect on December 20, 2015. To date, both sides have implemented twelve rounds of tariff reductions under the agreement, contributing to the continued expansion of bilateral trade. The two countries are currently advancing the second phase of negotiations on the China-Korea FTA, aiming to further enhance the liberalization and facilitation of trade in services and investment between the two countries.Statoil: This decision reflects a reassessment of strategic direction, with a further focus on the integrated electricity market.

EUR/USD Expects Fourth Weekly Gains Above 1.0900 Despite The US Dollar's Rebound Advance Ahead Of US NFP

Daniel Rogers

Apr 07, 2023 11:42

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Despite a recent retreat, the EUR/USD bulls maintain control around 1.0920. This reflects the typical Good Friday inactivity and apprehension ahead of the US Nonfarm Payrolls (NFP) report released early in the day. The major currency pair was volatile on Thursday as a result of the US Dollar's initial rebound on fears of a recession, but ended the day unchanged as disappointing US data contrasted with stronger Eurozone data.

 

Fears of a recession in the world's largest economy were prompted by consecutive lackluster US data and falling US Treasury bond yields, giving USD bears a reprieve on Thursday morning. As traders prepared for the all-important NFP, the dollar's subsequent gains were reversed by another disappointing US employment report.

 

Despite this, US Initial Jobless Claims for the week ending March 31 rose to 228K from 200K anticipated and an upwardly revised 246K the prior week. Notable is the increase in Challenger Job Cuts from 77,77K to 89,703K in the given month.

 

Notably, Reuters fanned fears of a recession by citing the most recent decline in the preferred bond market indicator of Federal Reserve (Fed) Chairman Jerome Powell. The most reliable bond market indicator of an imminent economic contraction, according to Federal Reserve research, is the "near-term forward spread" between the forward rate on Treasury bills 18 months from now and the current yield on three-month Treasury bills.

 

According to Reuters, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated in prepared remarks on Thursday that the global economy is projected to expand by less than 3% in 2023, a decrease from 3.4% in 2022.

 

In other news, Germany's Industrial Production (IP) increased 0.6% year-over-year in February, versus market predictions of -2.7% and previous readings of -1.7%. Additionally, the monthly figures exceeded expectations by 0.1%, coming in at 2.0% compared to 3.7% previously. On Wednesday, Germany Factory Orders for February improved to -5.7% YoY from -12.0% previously revised down and -10.5% market expectations, while MoM growth came in at 4.8% compared to 0.3% expected and 0.5% previous readings.

 

Wall Street and US Treasury bond yields have both reduced weekly losses as a result of these strategies, but investors remain skeptical.

 

In the context of less liquidity surrounding the March US employment report, sporadic activity on the major markets can keep the EUR/USD inactive and prone to abrupt price swings. Notable is the fact that recent dovish Fed forecasts and disappointing US data generate expectations for a positive surprise and enormous price volatility thereafter.


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