Miran Hints at Half-Point Fed Rate Cut in December

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

US Dollar        1.3900-1.4150

Euro                 1.6110-1.6360

Sterling            1.8310-1.8560

WTI Oil (opening level) $60.56

The CAD/USD is opening at 1.4027 ( 0.7129 )

The upbeat Canadian employment data might cap the downside for the Loonie.

Statistics Canada reported on Friday that the Unemployment Rate ticked down to 6.9% in October from 7.1% in the previous month, better than the 7.1% expected. Additionally, the Canadian economy added 66,600 jobs in October, marking a second consecutive month of surprise employment gains.

The report will make the Bank of Canada more comfortable to sit on the sidelines and let the rate cuts in this cycle work their way through the economy,

Headlines

·    The US Senate progressed a procedural measure that brings a funding bill to end the 40-day US government shutdown closer to approval. Eight Democrats diverged from leadership to back the motion, but the bill still requires a House vote.

·    Japan’s Eco Watchers Survey for October was far more positive than expected, possibly in connection with the arrival of PM Sanae Takaichi as Prime Minister. The Current conditions came in at 49.1 vs. 47.1 in Sep. and the Outlook rose to 53.1 vs. 48.8 expected and 48.5 in September. Takaichi is set to unveil new fiscal measures that are likely to prove more expansionary.

·    Federal Reserve Governor Stephen Miran suggested a half-point rate cut in December, which may bolster risk assets if widely supported. However, the shutdown delays key economic releases and poses execution risk in the House, potentially unsettling markets if the agreement falls apart.

·    Switzerland may soon secure a reduction of the US tariff on its exports from 39% to 15%, with an agreement possible in two weeks following talks intensified by US President Trump's directive. Switzerland is seeking relief as the original tariff impacted growth and raised unemployment to a four-year high.

Key Points

·    Equities: US rallied on shutdown progress and dovish Fed talk, Europe advanced on upgrades and corporate headlines, Asia mixed

·    Volatility: VIX slips to 17.6, thin liquidity and CPI in focus

·    Digital Assets: Bitcoin steady near $105k, alt-coins softer on lighter flows

·    Currencies: Sluggish action across the board, CHF firms on hopes for lower US tariff rate.

·    Commodities: Gold and silver jumps on renewed US Fiscal concerns

·    Fixed Income: Japan’s yield curve steepens on soft 30-year auction but front-end yields drop. US treasuries end slightly higher.

·    Macro events: UK Employment Data, US bond market close today to mark Veterans’ Day