Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3420-1.3670
Euro 1.6010-1.6260
Sterling 1.8420-1.8670
WTI Oil (opening level) $65.32
The CAD/USD is opening at 1.3553 ( 0.7378 )
Gold holds above USD 5,050 after weak US retail sales reinforced expectations of Fed rate cuts, pushing the dollar and US Treasury yields lower ahead of today’s delayed January payrolls report. Technical resistance is seen near USD 5,090, and a break above could open for a move toward USD 5,140, the 61.8% retracement of the recent correction. Meanwhile, silver volatility continues to ease, with more orderly price action also emerging in Shanghai ahead of the extended Lunar New Year holiday.
Oil trades firmer as Middle East tensions sustain a modest risk premium. The US signalled it is considering seizing tankers carrying Iranian oil, while President Trump threatened to deploy another aircraft carrier should nuclear talks with Iran fail. Separately, the weekly API report showed a 13.4 million barrel build in US crude inventories, and attention now turns to OPEC’s monthly market update.
Headlines
· US retail sales stalled in December, missing the expected 0.4% gain after November's 0.6% increase. Gains in sectors like building materials and sporting goods were offset by declines in miscellaneous retail and furniture stores. Excluding autos and gasoline, sales were flat, while GDP-related sales fell 0.1%, the first drop in three months.
· US compensation costs for Q4 2025 for civilian workers rose by 0.7%, below the 0.8% forecast and the smallest increase since Q2 2021. Both wages and benefits were up 0.7%. Private and government worker compensation rose 0.7% and 0.8%, respectively. Annually, costs increased 3.4%, slightly down from Q3's 3.5%.
· US household debt reached $18.8 trillion in Q4 2025, up $191 billion. Mortgages rose by $98 billion, credit cards by $44 billion, auto loans by $12 billion, HELOCs by $11.6 billion, and student loans by $11 billion. Wilbert van der Klaauw of the New York Fed reported rising mortgage delinquencies, especially in lower-income areas.
· In the UK, amid the Mandelson scandal, Keir Starmer's chief of staff resigned, sparking leadership questions. Despite calls for his resignation, cabinet support stabilized Starmer. Speculation on Bank of England rate cuts affected the currency, with the rate still at 3.75% and inflation expected to hit 2% by April.
· Rising fears about disruption from AI are weighing on shares across sectors, from small software companies to large wealth-management firms, as investors move quickly to avoid exposure to businesses seen as vulnerable, even as experts remain divided on how quickly and how deeply the technology will reshape the corporate landscape.
Key Points
· Equities: US ended mixed on weak retail sales, Europe paused after records, Hong Kong rose as tech and travel improved.
· Volatility: Event risk elevated, jobs today, CPI Friday, mild upside skew
· Digital Assets: Macro-sensitive consolidation, selective hedging in crypto equities
· Fixed Income: US treasury yields dip after weak US retail sales data
· Currencies: JPY firmed broadly late Tuesday and Wednesday in Asia even as Japan’s market were closed Wednesday.
· Commodities: Gold supported by weak US data ahead of jobs report; oil trades near USD 70 as Middle East risk premium builds again