Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.4000-1.4250
Euro 1.6150-1.6400
Sterling 1.8400-1.8650
WTI Oil (opening level) $58.57
The CAD/USD is opening at 1.4120 ( 0.7082 )
USD/CAD trades with a positive bias and holds steady above the 1.4100 mark.
Crude Oil prices struggle to capitalize on the bounce from a one-month low and meet with a fresh supply amid concerns that supply will exceed demand next year. This is seen as undermining the commodity-linked Loonie, which, along with the underlying bullish sentiment surrounding the USD, turns out to be a key factor acting as a tailwind for the USD/CAD pair.
Traders are ramped up for another interest rate cut by the Fed in December following the recent comments from influential FOMC members. This keeps a lid on further gains for the USD and the USD/CAD pair. Traders also seem reluctant to place aggressive directional bets and opt to wait for important macro releases from the US and Canada, due this week.
Headlines
· US Treasuries rallied further on a strong two-year treasury auction and on recent Fed rhetoric that has the market pricing higher odds of a December rate cut, which is now priced at 76% likely. The benchmark US 2-year treasury yield fell slightly to close just below 3.50% for the first time this month, while the benchmark 10-year yield also posted another low close for the month of November yesterday at 4.025% before rebounding to 4.038% in the Asian session. Today the US Treasury will auction 5-year notes.
· Federal Reserve Governor Christopher Waller backs a December interest‑rate cut amid labour‑market concerns and expects a meeting‑by‑meeting approach from January, while futures put the odds at about 70% for the 9–10 December meeting.
· San Francisco Fed President Mary Daly backs cutting rates next month amid a deteriorating labour market she sees as vulnerable to a non‑linear shift, views an inflation breakout as a lesser risk, and says the Fed can return inflation to 2% without higher unemployment—failure to do so would be a policy failure.
· Germany's IFO Business Climate Index fell to 88.1 in November, missing forecasts and signaling limited recovery prospects. Expectations declined, manufacturers and traders grew more pessimistic, and construction confidence dropped. Meanwhile, service sector sentiment improved, boosted by strong tourism.
· US President Trump and China’s President Xi held their first talks since last month’s tariff truce; Trump called it “very good,” citing trade, farm purchases and fentanyl, while rare‑earth sales talks aim for “general licences” by month’s end.
Key Points
· Equities: Tech-led U.S. rebound on rising December Fed-cut odds, Europe edged higher as semis offset Novo’s Alzheimer setback, Asia mixed.
· Volatility: VIX eases toward low-20s; options price ±80pt SPX week; mild upside skew on today’s expiry.
· Digital assets: BTC steady near $88k; IBIT/ETHA outflows persist; alt-coins stabilise with modest gains.
· Currencies: JPY firms slightly on new comments from officials. USD sideways
· Commodities: Strong rebound in precious metals, Crude oil under pressure on anticipation Ukraine peace deal would release Russian crude.
· Fixed Income: Short Japanese yields hit new post-2008 high. US treasury yields drop.