US Job Cuts Surge to Highest February Level Since 2009

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.4210 -1.4450

Euro                 1.5440-1.5670

Sterling            1.8400-1.8630

WTI Oil (opening level) $67.32

The CAD/USD is opening at 1.4338 ( 0.6974 )

The CAD traded between 1.426 and 1.434 in the last 24 hours. Look at the EURO and GBP and ask yourself if those levels against the Canadian $ are normal. The answer is no! This means that the world is waiting for some direction from a Canadian economy that has no functioning leadership to show some strength. If we did then the USD/CAD rate should be in the 1.41 range, that would make the crosses with EURO and GBP come back in line.

Headlines

·    Confusion over Trumps approach to tariffs continue after the president signed an amendment to the tariffs on Mexico and Canada, exempting USMCA-compliant products from levies until 2nd April.

·    ECB cut interest rates by 25 basis points, lowering the deposit rate to 2.50%, refinancing rate to 2.65%, and lending rate to 2.90%. This eases borrowing costs and reflects updated inflation assessments. Inflation is expected to average 2.3% in 2025 and 1.9% in 2026. Growth forecasts were reduced to 0.9% for 2025 and 1.2% for 2026 due to weak exports and investment.

·    US employers announced 172,017 job cuts in February 2025, the highest since July 2020 and the largest February total since 2009. Factors include government actions, cancelled contracts, trade war fears, and bankruptcies. The Government sector led with 62,242 cuts, followed by retail (38,956) and tech (14,554). Year-to-date cuts reached 221,812, the highest since 2009.

·    US initial jobless claims fell by 21,000 to 221,000 in late February, below the expected 235,000. Recurring claims rose by 42,000 to 1,897,000, close to the forecasted 1,880,000, showing a tight labor market. Federal employee claims increased by 1,020 to 1,634 amid DOGE firings.

·    The US trade deficit hit a record $131.4 billion in January, a $36 billion increase on the prior month, reflecting front loading of orders ahead of tariffs. Inbound shipments of finished metal shapes, a category that includes bars of precious metals, accounted for nearly 60% of the monthly increase as traders scrambled to rush bullion to New York depositories. 

Key Points

·    Equities: Tech slump drags US markets lower; DAX hits record; tariff relief boosts autos

·    Volatility: VIX surges 13.4% on tariff uncertainty; sticky volatility ahead of macro events

·    Digital Assets: BTC -4.8%; Trump's Bitcoin reserve plan underwhelms; crypto ETFs see outflows

·    Currencies: USDJPY testing cycle lows after stutter-step moves. EURUSD above 1.0800.

·    Fixed Income: European yields spiked further before easing well off highs. US 10-year back below 4.25%

·    Commodities: Tariff angst drive strong week for industrial and precious metals

·    Macro events: US February jobs report