Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3850-1.4100
Euro 1.6150-1.6400
Sterling 1.8350-1.8780
WTI Oil (opening level) $61.10
The CAD/USD is opening at 1.3977 ( 0.7155 )
Crude prices trade firmer on renewed U.S.–China trade optimism, extending last week’s rally after U.S. sanctions on russia’s two largest producers helped counter the prevailing narrative of a growing global surplus. The surge was partly driven by short covering, after hedge funds as of 21 October had built a record gross short position.
Gold extended its first weekly loss in nine weeks, as prospects for a U.S.–China trade deal lowered geopolitical tensions and reduced the haven appeal. Beyond the Trump–Xi meeting later this week. Focus will also turn to the upcoming FOMC meeting, with the latest CPI print keeping the door open for further U.S. rate cuts.
Headlines
· Trump increased tariffs on Canada by 10% after reacting to an Ontario ad during the World Series. He ended trade talks with Ottawa, citing the ad as misleading. Ontario Premier Doug Ford, after discussions with Prime Minister Mark Carney, announced a pause in the U.S. ad campaign to resume trade talks.
· Chinese and US officials developed a trade deal framework for Presidents Trump and Xi to finalize, including export controls, fentanyl and shipping levies, while US Treasury Secretary Scott Bessent said Trump’s threat of 100% tariffs on Chinese goods “is effectively off the table”, saying he also believe China would delay its rare-earth restrictions “for a year while they reexamine it”. Trump and Xi will meet Thursday at the APEC summit to finalize the agreement.
· September 2025 US inflation rose to 3%, up from 2.9% in August and below the 3.1% forecast. Energy prices climbed 2.8%, with notable increases in fuel oil and gasoline. New vehicle prices slightly rose, while food, used cars, trucks, and transportation services slowed. Shelter inflation stayed at 3.6%. Core inflation dipped to 3%. The monthly CPI increased 0.3%, driven by a 4.1% rise in gasoline, with the core index up 0.2%.
· Moody's maintained France's Aa3 credit rating but changed its outlook to negative due to political risks affecting deficit reduction. Recently, Fitch, DBRS, and S&P Global downgraded France's ratings. Finance Minister Roland Lescure emphasized the need for budgetary compromise and is committed to reducing the deficit to 5.4% of GDP by 2025 and below 3% by 2029. S&P rates France at A+ with a stable outlook, while DBRS rates it at AA, also stable.
Key Points
· Equities: Tech-led U.S. records on soft CPI. Europe nudged higher. Asia firm.
· Volatility: Trade deal progress tempers risk. VIX ~16. SPX ±1.4% range ahead of FOMC and Big Tech earnings
· Digital Assets: Crypto firms on soft CPI and trade optimism
· Currencies: USD sideways, JPY weaker, AUD firmer on hopes for US-China trade deal
· Commodities: Grains pop, oil firms, and gold eases as U.S.–China trade deal draws closer
· Fixed Income: Strong risk sentiment on hopes for US-China trade deal sees higher yields everywhere