Mixed Market Reaction to Nvidia Results

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

US Dollar        1.3560-1.3810

Euro                1.6030-1.6280

Sterling           1.8400-1.8650

WTI Oil (opening level) $64.35

The CAD/USD is opening at 1.3687 ( 0.7306 )

Crude oil continues to trade nervously, unable to mount a charge on the recent highs as the world awaits Iran-US talks on Iran’s nuclear programme today and whether the massive US military presence around Iran will result in hostilities and a disruption of oil export flows from Iran and potentially other regional producers, should oil export flows through the Straits of Hormuz (about 25% of world export flows) be disrupted.

Headlines

• Nvidia, the world’s largest company by market cap, reported very strong earnings and forecasts Wednesday after the US market close, which initially saw the stock rising more than three percent in after-hours trading, though much of that move was later erased, suggesting concerns that the market is considering the longer term growth potential of the company relative to its valuation.
• BoJ Governor Ueda hinted at a potential rate hike, keeping the March and April meetings open for action. Rate increases depend on hitting a 2% inflation target by late fiscal 2026, with the timeline potentially moved up by strong wage gains. Decisions will follow data analysis by March and April, amid speculation of an April hike. BoJ hawk Takata was also out arguing in favour of a rate hike.
• US 30-year fixed mortgage rate fell to 6.09%, the lowest since September 2022, according to the Mortgage Bankers Association. Applications grew 0.4%, with refinancing up 4.1% but purchases down 4.7%. Lower rates help affordability, but home prices are higher than last year amid economic uncertainty.
• Hong Kong's inflation rate fell to 1.1% from 1.4% in December. Price growth slowed in housing, food, and transport, with deeper deflation in durable goods and clothing. Utilities prices rebounded, while inflation increased for services and goods. Consumer prices rose 0.2% monthly, with underlying inflation at 1%, down from 1.2%.
• Sentiment in Hong Kong improved as the 2026/27 budget projected an earlier-than-expected surplus. Financial Secretary Paul Chan announced measures to enhance the city's financial role and innovation. Q4 GDP growth hit 3.8%, the fastest in two years, with annual growth rising to 3.5% from 2.6% in 2024.
• Germany's economy grew 0.3% in Q4 2025, rebounding from previous stagnation due to easing inflation and lower borrowing costs. Household consumption rose by 0.5%, government spending by 1.1%, and construction investment by 1.6%. Inventory and external demand slightly trimmed growth. Annually, Q4 growth was 0.4%, with full-year GDP up 0.2% after a 0.5% decline in 2024.

Key Points

• Equities: Stocks rose across regions: U.S. tech led, Europe hit records on tariff relief, Hong Kong climbed on budget optimism.
• Volatility: VIX softer but downside protection remains elevated ahead of US data and post-Nvidia follow-through
• Digital Assets: IBIT and ETHA surge; crypto proxies firmer as risk appetite improves
• Fixed Income: US Treasury yields rangebound, Japan’s JGB slightly weaker
• Currencies: JPY erases some of Wednesday sell-off on BoJ rhetoric, USD weak.
• Commodities: Gold and silver bottled up in range after silver breakout fails to follow through higher.