US Durable Goods Orders Soar 9.2% on Aircraft Demand, Beating Expectations

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

US Dollar        1.3760-1.3990

Euro                 1.5650-1.5890

Sterling            1.8360-1.8600

WTI Oil (opening level) $62.01

The CAD/USD is opening at 1.3884 ( 0.7203 )

Headlines

·    China may suspend its 125% tariff on some US imports, as the economic costs of the trade war weigh heavily on certain industries. Medical equipment and ethane are among goods that may see exemptions. Meanwhile, Trump said his administration was talking with China on trade, despite Beijing denying the existence of negotiations on a deal and demanding the US revoke all unilateral tariffs.

·    Market risk sentiment further improved after Fed Govenor Waller said he would support rate cuts in the event of aggressive tariff levels hurt the jobs market, while Cleveland Fed President Hammack said the Fed could move on rates as early as June.

·    Tokyo's Core CPI increased by 3.4%, surpassing March's 2.4% and market expectations of 3.2%. This is the sixth month with inflation at or above the Bank of Japan's 2% target, suggesting a shift towards monetary policy normalization. However, the Bank of Japan is expected to keep its 0.5% policy rate due to uncertainty over new U.S. tariffs.

·    US durable goods orders rose 9.2% to $315.7 billion, exceeding the expected 2% increase, mainly due to a surge in commercial aircraft orders. Transportation equipment orders increased 27%, with nondefense aircraft and parts up 139% and motor vehicles and parts up 2.3%. Excluding transportation, orders were stable.

·    US existing home sales fell 5.6% to an annual rate of 4.02 million units, below the expected 4.13 million, marking the steepest decline in over two years. This occurred despite a slight decrease in borrowing costs, which boosted mortgage applications.

Key Points

·    Equities: Tech earnings boost after-market; Alphabet, Intel volatile; trade optimism supports global rally

·    Volatility: VIX declines significantly; reduced anxiety; cautious optimism ahead of earnings

·    Digital Assets: Bitcoin stabilizes post-surge; mixed altcoins; institutional ETF inflows high

·    Currencies: Improved risk sentiment triggers profit taking in EUR and JPY

·    Fixed Income: US Treasuries are heading for a small weekly gain

·    Commodities: Natural gas loss offsetting weekly gains in metals and softs