Global Markets Watch UK Data, RBA Decision, US-Russia Talks

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

US Dollar        1.4100-1.4300

Euro                 1.4730-1.4960

Sterling            1.7750-1.7980

WTI Oil (opening level) $71.43

The CAD is opening at 1.4187 ( 0.7048 )

Headlines

·    The US dollar firmed slightly as US treasuries opened on a weak note overnight after yesterday’s holiday.

·    EURGBP posted its lowest daily close since January, trading near 0.8300 ahead of this morning’s overall strong batch of UK earnings, employment and claims data.

·    UK Dec. ILO Unemployment Rate out steady at 4.4% vs. a rise to 4.5% expected. Dec. Employment Change came in at +107k versus +48k expected. UK Average Weekly Earnings ex Bonus rose 5.9% YoY as expected and vs. 5.6% in Nov. While the headline Average Weekly Earnings rose 6.0% YoY vs. 5.9% expected and 5.5% in Nov. UK Jan. Jobless Claims Change rose +22k but Dec. claims were revised -15.1k lower vs. the +0.7k original release. UK Jan. Payrol Employees rose +21k vs. -30k expected and the Dec. figure was revised up to -14k from -47k.

·    The RBA cut its Cash Rate Target rate as most expected, taking the rate 25 basis points lower to 4.1%, but guided against any expectations for successive rate cuts at coming meetings, saying it would remain data-driven. The Australian 2-year yield rose some 5 basis points as the market lowered expectations for RBA cutting beyond an expected cut in perhaps May or July.

·    Top US and Russian officials are meeting today in Saudi Arabia to discuss ending the war in Ukraine, with no representation from Ukraine or Europe present. The US team includes National Security Advisor Mike Waltz and Secretary of State Marco Rubio, while Russia is represented by Foreign Minister Sergei Lavrov and others.

Key Points 

·    Equities: US closed for Presidents' Day; European defense stocks surge; Asia rallies on Xi's pro-business shift

·    Volatility: VIX stable; S&P 500 futures green; Trump press conference could shake markets

·    Digital Assets: Bitcoin -0.50%; ETH -2.99%; XRP -4.06%; BTC-S&P 500 correlation hits zero

·    Currencies: A “hawkish cut” from the RBA boosts the Aussie

·    Commodities: Political jitters boost gold. Crude up on potential OPEC+ delay

·    Fixed Income: 10-year JGB jumps to new cycle high. US 10-year opens week near key 4.50%