Mortgage Applications Jump 11% as Falling Rates Drive Rebound in Purchases and Refinancing

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

US Dollar        1.3760-1.3990

Euro                 1.5560-1.5800

Sterling            1.8390-1.8630

WTI Oil (opening level) $59.18

The CAD/USD is opening at 1.3883 ( 0.7203 )

Headlines

·    Trump’s Big News Conference” today is expected to be the announcement of a trade deal with Britain, and if correct if would be the first deal announced since Trump imposed tariffs on America’s major trading partners.

·    The Trump administration plans to revoke Biden-era AI chip restrictions, potentially easing global semiconductor trade rules. The AI diffusion rule that was set for May 15 and aimed at limiting China's access to AI chip technology, will not be enforced, according to unnamed sources referred to in major news media. The Trump administration is said to be working on new rules related to access to high-end chips.

·    The Fed held rates at 4.25%–4.50%, cautious about tariffs impacting inflation and growth. Policymakers noted rising uncertainty and risks of both higher unemployment and inflation. Fed Chair Powell said there's no rush to change rates, and the Fed will monitor data, noting solid economic activity despite export fluctuations.

·    The Manheim Used Vehicle Value Index for the US rose by 2.7% month-on-month in April 2025, marking its first increase in three months and the largest since July 2024, following the early April tariff announcement.

·    US mortgage applications increased by 11% in the week ending May 2nd, reversing three weeks of declines due to falling mortgage rates. New home purchase and refinancing applications both rose by 11%, with Veterans Affairs loans up 26%.

Key Points 

·    Equities: US up on steady Fed; Alphabet drops sharply; BMW gains despite weak earnings; UK pauses rally

·    Volatility: VIX declines; markets calm post-Fed; subdued ahead of Trump’s trade dea

·    Digital assets: Bitcoin near $100k; altcoins gain; crypto sentiment aligned with equity optimism

·    Fixed Income: US treasury yields steady post-Fed, Japanese government bond yields rise on weak auction

·    Currencies: USD firms as Fed indicates no rush to cut

·    Commodities: Gold holds below USD 3400, Copper softness as NY premium drops