Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3620-1.3870
Euro 1.5860-1.6110
Sterling 1.8290-1.8540
WTI Oil (opening level) $103.66
The CAD/USD is opening at 1.3747 ( 0.7274 )
Gold continues to hold above support around USD 4,500, with the next key downside level being the 200-day moving average, last seen near USD 4,355. Traders remain focused on the Middle East crisis and the inflationary impact of sustained higher energy prices, which are pushing global inflation higher while forcing central banks to shift their focus toward potential rate hikes. This helps explain the current reaction function, where escalating tensions can weigh on gold through higher yields and a stronger dollar, while any credible path toward de-escalation or peace may ultimately support prices.
Headlines
· Trump said he called off a planned strike on Iran for Tuesday after appeals from Gulf allies, citing “serious negotiations”.
· Kevin Warsh will be sworn in as Fed Chair by President Trump on Friday at the White House, as Fed officials continue to signal patience on rate cuts amid persistent inflation concerns.
· Japan’s Q1 2026 GDP grew 2.1% annualized, beating the 1.7% consensus, with consumption up 0.3% q/q and net exports adding 0.3 ppt; the GDP deflator stayed at a stronger-than-expected 3.4%, bolstering the case for further BoJ hikes.
· RBA Assistant Governor Sarah Hunter warned inflation expectations risk drifting higher and that a sharp slowdown might be needed to re-anchor them if they slip out of control, but RBA minutes showed that the bank felt that the three consecutive meetings of rate hikes would give the board a chance to pause and assess the impact on Australian households.
· The US NAHB/Wells Fargo Housing Market Index rose to 37 in May 2026 from 34 in April, beating forecasts of 35. Current sales, six-month sales expectations, and buyer traffic each gained three points (to 40, 45, and 25, respectively). Builders cutting prices fell to 32% from 36%, though the average discount increased to 6% from 5%.
Key Points
· Equities: US stocks were mixed, Europe rose on energy and de-escalation hopes, while Asia struggled with oil and yields.
· Volatility: VIX eases, bond yields elevated, Iran tensions cool slightly, Fed minutes and Nvidia earnings ahead
· Digital Assets: Bitcoin near USD 77k, ETF outflows continue, yields and macro dominate sentiment
· Fixed Income: Global bonds remain under pressure, especially at long end of curve, where yields rose again early Tuesday
· Currencies: Recent stronger USD focus remains on rising treasury yields. Sterling recovers again.
· Commodities: Oil remains elevated near USD 110 while gold holds above USD 4,500
· Macro events: UK Employment and Claims data, Canada April CPI