Market Update: Key Economic Data and Global Trends Impacting Markets

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.4240-1.4450

Euro                1.4770-1.5000

Sterling           1.7740-1.7970

WTI Oil (opening level) $71.04

The Canadian dollar (CAD) is opening at 1.4349 (0.6969).

Today marks the release of the U.S. Non-Farm Payrolls (NFP) report, a key economic indicator known for its potential to impact the financial markets. Given recent trends, the data could influence USD strength, making it a focal point for market participants.

Headlines

• Bank of England Rate Cut: The Bank of England lowered its policy rate by 25 basis points to 4.50% and reduced the UK’s growth outlook for the year. Two policymakers supported a larger 50-basis point cut, while one dissenter favored no change. The central bank maintained its long-term inflation guidance despite expecting near-term inflation to rise faster than previously forecasted.
• US Treasury Policy: US Treasury Secretary Scott Bessent reaffirmed the country’s strong dollar policy, following discussions with Federal Reserve Chair Jerome Powell. The Treasury announced that there will be no increase in coupon bond and floating-rate note issuance for at least the next several quarters.

Key Market Highlights

• Equities: US markets mixed; Amazon declines post-earnings, while European markets reach record highs and Asian markets remain uncertain.
• Volatility: The VIX decreased by 1.71%, while the VIX1D surged by 42%, with attention on the upcoming jobs report.
• Digital Assets: Bitcoin remains below $100K, with crypto stocks declining.
• Currencies: The Japanese yen reached new local highs before retreating overnight.
• Commodities: Gold is on track for a sixth consecutive weekly gain, while oil heads for a third straight weekly decline.
• Fixed Income: Japanese bond yields hit new highs, supported by strong consumer spending data. UK gilt yields rebounded following the Bank of England's rate cut.
• Macro Events: Markets are closely watching the US January Jobs Report, Canada’s January Employment Data, and the US Preliminary February University of Michigan Sentiment Survey.

Markets remain focused on economic data releases and central bank policies, which continue to shape short-term movements across asset classes.