- Canada’s new budget forecasts a $72 billion deficit.
- US ADP employment report in focus.
- US dollar rises across the board
USDCAD open: 1.4132, overnight range 1.4098-1.4139, close, 1.4104, WTI 60.89, Gold 3964.71
The Canadian dollar is sinking under the weight of broad-based US dollar demand alongside ongoing concerns about rising recession risks in Canada. Prime Minister Mark Carney’s government unveils their latest budget which is expected to double the deficit.
The federal government unveiled its new budget outlining $178 billion in additional spending over five years. Officials say this will be partially offset by about $56 billion in savings through a “Comprehensive Expenditure Review.” Despite those offsets, the fiscal shortfall has now exploded to $78 billion.
Oil markets remain firm. West Texas Intermediate (WTI) traded steadily between $60.02 and $61.09, supported by stronger-than-expected US crude inventory data. The American Petroleum Institute reported stockpiles rose by 6.5 million barrels for the week ending October 31.
Bank of Canada Governor Tiff Macklem appears before the House of Commons Finance Committee today.
The US dollar is gaining across the board as tech stocks take a beating. The sell-off followed warnings about a potential correction from the CEOs of JPMorgan Chase, Morgan Stanley, and Goldman Sachs.
Today, the US Supreme Court is reviewing whether President Trump has the authority to impose tariffs under emergency powers. On the eve of the hearing, Trump declared on social media that the case was “literally, LIFE OR DEATH for our Country.”
US employment data is also in focus. With the nonfarm payrolls report delayed due to the ongoing government shutdown, traders are looking to ADP for direction. The report is expected to show an increase of 25,000 jobs after last month’s 32,000 decline.
Asian markets ended the day lower. Japan’s TOPIX fell 1.19%, Hong Kong’s Hang Seng was unchanged, and Australia’s ASX 200 slipped 0.13%.
As of 7:40 am, the German DAX is down 0.39%, the French CAC-40 and the UK’s FTSE 100 are flat. S&P 500 futures are down 0.17%, the US Dollar Index (DXY) is at 100.18 and the 10-year Treasury yield sits at 4.084%.
EURUSD traded quietly between 1.1476 and 1.1498 as it consolidates recent losses. The euro found mild support after Eurozone and German Composite and Services PMIs came in slightly stronger than expected, with the report highlighting that Germany was the main driver of service-sector growth. Traders are now awaiting the ADP results for fresh direction.
GBPUSD extended its slide within a 1.3010–1.3053 band. Persistent US dollar strength, ongoing fiscal uncertainty in the UK, and growing speculation that the Bank of England may cut rates in December are weighing on the currency. A break below 1.3000 could expose the April low near 1.2705.
USDJPY advanced between 152.96 and 153.64, buoyed by the stronger US dollar and broad equity weakness that reversed yesterday’s “safe-haven yen” flows. Japan’s Vice Minister for International Affairs, Atsushi Mimura, raised eyebrows by saying yen moves were “deviating from what might be expected,” hinting at possible intervention. However, most analysts think authorities will stay on the sidelines unless USDJPY climbs past 155.00.
AUDUSD slipped within a narrow 0.6479–0.6500 range. The downside was limited after S&P Global Services PMI inched up to 52.5 from 52.4 in September, while similar steady readings from China’s services sector provided some support.
