Trump Signals Putin Ready for Ukraine Peace Talks; Hot US Inflation Data Jolts Markets

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

US Dollar        1.4200-1.4400

Euro                 1.4740-1.4970

Sterling            1.7710-1.7930

WTI Oil (opening level) $70.45

The CAD is opening at 1.4294 ( 0.6996 )

Headlines

US President Trump says that Russian leader Putin is ready to negotiate an end to the Ukraine war, with talks to start “immediately”. The US is seen likely to demand that European allies provide protection against Russia along its eastern edges after any peace deal, with enormous EU defence spending needed to build any credible military force.

UK Q4 GDP estimate comes in this morning at +0.1% QoQ and +1.4% YoY, better than the -0.1%/+1.1% expected, respectively.

US January CPI ex Food and Energy rose 0.446%, above the 0.3% forecast, with the annual rate at 3.3% versus 3.1% expected. US headline CPI rose by 0.467% in January, exceeding the 0.3% consensus and accelerating from December's 0.393%. The annual rate increased to 3.0%, surpassing the expected 2.9%. Shelter costs rose 0.4%, contributing significantly to the overall increase. Energy prices climbed 1.1%, with gasoline up 1.8%, while food prices increased 0.4%, driven by a notable rise in egg prices.

Key Points

·    Equities: CPI-driven selloff; DAX, STOXX 50 hit highs; Heineken +14% on earnings; Alibaba +8.5% on AI news

·    Volatility: VIX steady at 15.89; short-term indicators down; PPI, jobless claims in focus

·    Digital Assets: Bitcoin -1.83%; Goldman Sachs raises crypto ETF holdings; XRP slumps 9.9%

·    Currencies: USD retreats after spike on hot core inflation data yesterday. EURUSD threatening resistance on strong Euro.

·    Commodities: Gold recovers quickly from sell-off. Silver threatening key resistance again.

·    Fixed Income: US yields jump on hot US January inflation data.

·    Macro events: Eurozone Dec. Industrial Production, US Weekly Jobless Claims, US Jan. PPI