Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3550-1.3800
Euro 1.6000-1.6250
Sterling 1.8460-1.8710
WTI Oil (opening level) $63.08
The CAD/USD is opening at 1.3673 ( 0.7314 )
Canadian job numbers come out this morning. This might break the narrow range that the USD/CAD has been trading in all week. But given how cold it is outside, it's likely to be frozen in the same range for another week.
Headlines
· The ECB held interest rates steady at its first 2026 meeting as expected, with the main rate at 2.15%. It views eurozone inflation stabilizing at 2% amid geopolitical risks. President Lagarde noted the inflation outlook is stable but warned against reacting to individual data points due to increased uncertainty.
· US job openings fell by 386,000 to 6.542 million in December 2025, the lowest since September 2020, below the forecast of 7.2 million. Declines occurred in professional services, retail, and finance across all regions. Hires and separations stayed at 5.3 million, with minimal change in quits and layoffs.
· US Jan. Challenger Job Cuts rose to more than 108,000, a sudden spike that spooked the market. This data series is choppy, with no seasonal smoothing, but it touched off a rally in US treasuries as noted below.
· Japan's household spending fell 2.6% year-on-year in December 2025, below expectations for stable figures, following a 2.9% decline the previous month. Monthly spending dropped 2.9%, missing forecasts of a 1.3% decrease, reversing November's sharp 6.2% rise.
· The Bank of England maintained the Bank Rate at 3.75% in February with a close 5-4 vote, with four dovish dissenters. Governor Bailey hinted at openness to further rate reductions, making for a solid dovish surprise. Inflation is above 2% but expected to decline by April. Economic and labor market weaknesses persist, and further rate cuts may depend on new inflation data.
· US job quits rose to 3.204 million in December 2025, the highest in six months, mainly in retail (+87,000) and information (+28,000), but fell in professional services (-151,000). The quits rate stayed at 2%. Increases were seen in the Midwest (+59,000) and West (+13,000), with declines in the South (-50,000) and Northeast (-11,000).
· US weekly initial jobless claims rose by 22,000 to 231,000, exceeding expectations. Continuing claims increased by 25,000 to 1,844,000 due to winter storm disruptions. Federal claims fell by 230 to 568 amid shutdown impacts.
Key Points
· Equities: Tech-led sell-off broadens as markets reassess AI capex returns versus near-term earnings durability.
· Volatility: Short-dated uncertainty elevated, protection demand persists, SPX swings still expected
· Digital assets: Crypto weak with risk assets, IBIT and ETHA outflows weigh, sentiment remains fragile
· Currencies: US dollar mixed after Thursday’s modest rally. Sterling plunges on dovish Bank of England
· Commodities: Silver whipsaws on liquidity stress, gold steadier, oil pinned to U.S.–Iran talks, gas digesting a 360 bcf draw
· Fixed Income: US Treasury yields plunge on job cuts data, weak risk sentiment