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On April 4, the Yangtze River Delta Railway ushered in the peak of passenger flow during the Qingming Festival. It is expected to send 4.1 million passengers today, 365,000 more than the same period last year, an increase of about 9.8%, and is expected to set a new record for single-day passenger volume. This years Qingming Festival railway transportation will start from April 3 to 7. The Yangtze River Delta Railway is expected to send 17.6 million passengers in 5 days, with an average daily passenger flow of 3.52 million, a year-on-year increase of 6.8%.The yield on the two-year U.S. Treasury note fell to a six-month low of 3.6550% and was last at 3.6611%.On April 4, local time on April 3, U.S. Secretary of Health and Human Services Robert Kennedy Jr. said that about 20% of the layoffs in the Department of Government Efficiency were wrong and needed to be corrected. The U.S. Department of Health and Human Services laid off about 10,000 people on the 1st. Kennedy said that people who should not have been laid off were laid off, and the department is restoring their positions. Kennedy said that canceling the entire lead poisoning prevention and monitoring department of the Centers for Disease Control and Prevention was one of the mistakes. At present, it is unclear what other projects Kennedy may plan to restore.Bank of Japan Governor Kazuo Ueda: Will consider the impact of food costs on consumers.On April 4, local time on the 3rd, the automobile company Stellantis said that due to the impact of the US import automobile tariff policy, the company decided to lay off 900 employees in its five US factories and suspend production operations at two assembly plants in Canada and Mexico. Antonio Filosa, Chief Operating Officer of Stellantis Americas, said that the US factories that were laid off were powertrain and stamping parts factories, which produced spare parts for two assembly plants in Canada and Mexico. According to the plan, the assembly plant in Canada will stop production for two weeks, and the assembly plant in Toluca, Mexico will suspend production throughout April. Filosa said the company is "continuing to evaluate the medium- and long-term impact of tariffs on operations."

USD/CAD Remains in Resistance Territory in the Absence of a Catalyst

Daniel Rogers

Apr 29, 2022 09:49

At the time of writing, the USD/CAD currency pair was trading at 1.2805 and consolidating in resistance territory. The US dollar strengthened against the majority of the G10 currencies before easing somewhat near the close of the day, providing some comfort to the commodity complex. Nonetheless, DXY, a measure of the dollar's value relative to a basket of currencies, hit a two-decade high as investors priced in a succession of relatively low interest rates from the Federal Reserve.

 

A rebound in risk appetite occurred throughout the Wall Street session, as investors noticed evidence of robust consumer demand hidden by the unexpected decline in Gross Domestic Product growth for the last quarter, the first decline in GDP growth since 2020. Nonetheless, the risk-off tone is firmly established, as evidenced by the S&P 500's more than 5% decline in April, which is on track to be the worst month since 1987's bear market.

 

Concerns over China's war against COVID, combined with the Ukraine crisis and hawkish central banks intent on tightening monetary policy, are fueling recession fears. Treasury Secretary Janet Yellen came out overnight, stating that the global pandemic and Russia's invasion of Ukraine demonstrate the possibility of future large economic shocks, adding that downturns are "expected to continue to stress the economy."

 

Meanwhile, the price of crude oil has increased to USD107/bbl, bolstering the CAD, despite the growing likelihood of a European ban on Russian oil. "Germany is considering a gradual suspension of Russian oil imports, which would result in a broader sanction by the area. Germany's minister has already stated that the country can survive without Russian oil," according to analysts at ANZ Bank.

 

"Investors are anxious about compensating for the barrels lost as a result of the impending European sanctions. Oil product prices are also increasing, which helps refiners' profitability. However, demand for oil products remains sluggish in China as the number of COVID cases continues to rise."

All Eyes on the Federal Reserve

All eyes will now be on the Federal Reserve meeting next week. Expectations of the Fed tightening are high. Markets anticipate at least a 50 basis point increase at the May 3-4 meeting and another at the June 14-15 meeting. This is fully priced in, with over 25% odds of a June 75 basis point shift. The shock will come if anything falls short of or exceeds this consensus at next week's summit.

 

"Looking ahead, the swaps market is pricing in 275 basis points of tightening over the next 12 months, implying a policy rate at 3.25 percent. While this comes close to meeting our own target of a 3.5 percent terminal rate, we continue to see risks that the predicted terminal rate will move even higher if inflation proves to be even more resistant than expected," Brown Brothers Harriman analysts wrote.

USD/CAD Technical Evaluation

According to the following analysis, USD/CAD is consolidating in resistance zone and may be on the verge of a big correction towards 1.2720/50:

 

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