Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3770-1.4020
Euro 1.6010-1.6260
Sterling 1.8490-1.8740
WTI Oil (opening level) $60.07
The CAD/USD is opening at 1.3890 ( 0.7200 )
Equity markets continue to grind higher, but the calm surface hides a growing sensitivity to headlines rather than data.
The main swing factors are political and geopolitical. US Federal Reserve chair Jerome Powell confirmed the existence of Department of Justice subpoenas, keeping questions around policy credibility and institutional independence in focus. At the same time, tensions in the Middle East appear to have cooled somewhat, easing pressure on energy markets.
Oil softened further, down 4.5% over the past two days after the US said it would hold off on attacking Iran for now, reducing the risk of a major supply disruption from the Middle East. The US is nevertheless continuing to build its military presence in the region, for now underpinning a residual geopolitical risk premium.
Silver continues to attract speculative interest, increasingly from both buyers and sellers, resulting in erratic price swings and challenging trading conditions. Tightness in the physical market is showing tentative signs of easing, with silver flowing from COMEX-monitored warehouses back toward Europe, while emerging stress among industrial users struggling with elevated prices may eventually help stabilise the market. Demand from Chinese speculators, however, remains strong
Headlines
· U.S.-Taiwan trade agreement, signed Thursday, aims to enhance U.S. semiconductor production and lower tariffs. Taiwan Semiconductor Manufacturing will build factories in Arizona, with a $250 billion investment. The U.S. will cut tariffs on Taiwanese goods to 15% and exempt expanding chipmakers.
· U.S. initial jobless claims fell by 9,000 to 198,000 for the week ending January 10th, contrary to forecasts of 215,000, marking the second-lowest in two years. Continuing claims decreased by 19,000 to 1,884,000, meeting expectations. Federal employee claims increased by 170 to 646 amid the government shutdown.
· Germany's GDP rose 0.2% in 2025, following a 0.5% drop in 2024, driven by increased household consumption and government spending. Exports declined due to US tariffs and competition. Manufacturing saw losses, especially in automotive, and construction faced high costs. Services showed mixed results, with support from trade and transport.
· The NY Empire State Manufacturing Index increased to 7.7 in 2026, up from December's -3.7, exceeding expectations. In January, new orders and shipments rose, while employment and the average workweek decreased. Input prices stayed high, but selling prices slowed. Capital spending grew for the third month, and firms were optimistic about future conditions.
Key Points
· Equities: U.S. and Europe edged higher on chips and earnings, while Asia slipped as China policy moves hit Hong Kong tech.
· Volatility: VIX remains low, headline-driven risk, geopolitics easing
· Digital assets: Bitcoin consolidates, Ether steady, IBIT/ETHA softer, US crypto bill delay
· Currencies: JPY firms even more than relatively firm US dollar
· Commodities: BCOM nears 2022 record high on precious metal and energy gains, led by silver, gold and diesel.
· Fixed Income: US Treasury market remains in hibernation. US high yield bonds in demand.