Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.4060-1.4310
Euro 1.6130-1.6380
Sterling 1.8630-1.8880
WTI Oil (opening level) $73.29
The CAD/USD is opening at 1.4187 ( 0.7048 )
US Treasury traders pressed the pause button Monday after the gap higher in yields to start the week, with treasuries rallying modestly in early Tuesday hours on a shift to the negative in risk sentiment in the Asian trading session. The benchmark two-year treasury yield closed at a cycle high of 4.226%, up five basis points versus last Thursday’s close (Friday saw no trading on a market holiday) but the intraday range was very compressed. The yield was about two basis points lower in overnight trading early Tuesday, below 4.21%, with the US Treasury set to auction 2-year notes later in the day. The benchmark 10-year yield saw similar action, easing just below 4.50% early Tuesday after a five-basis point advance on Monday.
Headlines
· The Pentagon told lawmakers it may need $80 billion in emergency funding for the war, though the White House has yet to submit a formal request to Congress.
· Australia’s manufacturing PMI rose to 51.2 in June from 50.7, its third month of expansion, supported by modest job gains. Output and new orders still slipped slightly, delivery times lengthened, and input/output prices rose on higher fuel and transport costs, though inflation eased. Business sentiment strengthened on expansion plans and expectations of better future orders.
· Canada’s headline inflation rose to 3.2% in May 2026 from 2.8%, the fastest since December 2023 and above the 3% forecast, driven by surging gasoline and energy prices and higher food costs. BoC core measures stayed steady (trimmed 2%, median 2.1%). Inflation eased for shelter and health/personal care, while household operations prices fell. CPI rose 1% month-on-month.
· Euro Area consumer confidence rose to -17.7 in June from -19 in May, missing the -17.5 forecast. EU confidence also improved, to -17 from -18.2. Easing oil prices helped, but sentiment remains below long-term and pre-conflict levels amid ongoing economic and purchasing power concerns.
· Markets reacted to PM Keir Starmer’s resignation, which opens the way for Andy Burnham—fresh from a by-election win and backed by Wes Streeting—to seek the premiership. Investors are watching for clarity on Burnham’s fiscal plans, amid concern that higher spending and gilt issuance could further strain the UK’s fragile public finances and high debt.
Key Points
· Equities: US tech dragged Wall Street lower, Europe gained on peace hopes, while Asia cooled after Monday’s AI-led records.
· Volatility: PCE inflation, Micron earnings, AI valuation concerns, downside hedging demand, VIX edges higher
· Digital Assets: Bitcoin consolidates, ETF outflows slowing, crypto equities outperform
· Commodities: Gold and crude trade softer while grains see another week of aggressive long liquidation
· Fixed Income: US treasuries rally slightly early Tuesday Monday’s cycle high close for the US 2-year benchmark.
· Currencies: USD remains firm near cycle highs. AUD and NZD slip early Tuesday.