Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3650-1.3900
Euro 1.5980 -1.6230
Sterling 1.8660 -1.8910
WTI Oil (opening level) $87.51
The CAD/USD is opening at 1.3776 ( 0.7259 )
The US dollar fell sharply in the wake of the US Treasury’s announcement of a doubling of its long-term treasury buyback operations as the move suggest the treasury won’t tolerate higher yields, setting up interesting questions about the independence of the Fed as well.
If the Fed does not look to raise interest rates, the support of the USD is weakened.worldwide.
Headlines
· The U.S. Treasury will at least double buybacks of 10- to 30-year debt after 30-year yields reached their highest since 2007, highlighting Treasury Secretary Scott Bessent’s increasingly interventionist approach to containing borrowing costs. The move, which pushed the 30-year yield around 9 bps lower to 5.19% ahead of a USD 16 billion 20-year auction, marks a notable departure from the traditional “regular and predictable” approach and may be viewed as an attempt to influence the yield curve and support market stability. The move hurt the USD, lifting gold and other hard assets.
· July FOMC minutes showed most officials favored holding rates, though several wanted a hike and said more increases may be needed if inflation stays high. They noted tighter financial conditions, broad-based price gains, and an outlook of similar inflation but slightly weaker growth. Chair Warsh floated cutting to six meetings a year, with no change for 2026.
· Trump said oil is still flowing through the Strait of Hormuz and signalled openness to talks with Tehran “at some point,” while simultaneously stepping up economic pressure on Iran seeking to isolate Iran economically after its military campaign failed to force a surrender. He threatened an “ECONOMIC D-DAY”, warning countries providing Iran with an economic lifeline of severe consequences, putting particular focus on China as the largest buyer of Iranian oil.
· Australia’s August employment data showed a small 16.3k gain in full time employment, though July full time employment was revised up nearly 30k to 48.9k, while August part-time employment fell -32.2k (and July revised -16k lower). The overall Unemployment Rate rose 0.1% to 4.5% versus expectations for an unchanged 4.4% reading, despite a 0.1% drop in the participation rate.
Key Points
· Macro: US Treasury yield curve in focus after US Treasury announces buyback announcement aimed at taming long-term yields.
· Equities: US equities recovered as Treasury buybacks eased bond pressure, Europe stayed mixed, Asia rebounded sharply, led by Korean semiconductors.
· Digital Assets: Bitcoin surges as short squeeze and White House crypto optimism collide
· Commodities: Gold surges as yields and dollar tumble, while oil holds firm on Iran tensions
· Fixed Income: US Treasury yield curve flattens after US Treasury buyback announcement. Japan’s long yields dropped even more sharply.
· Currencies: The US dollar weakened sharply on the US Treasury buyback announcement, particularly against the Swiss franc.