Weak US Data Fuels December Fed-Cut Bets

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

US Dollar        1.3960-1.4210

Euro                 1.6180-1.6430

Sterling            1.8450-1.8700

WTI Oil (opening level) $57.77

The CAD/USD is opening at 1.4092 ( 0.7096 )

US macroeconomic figures released on Tuesday showed a weaker-than-expected consumer spending in September, while producer prices remained steady, and consumer confidence deteriorated, weighed by higher prices and worsening job prospects. The data prompted investors to ramp up bets of a Fed rate cut in December.

Headlines

• Kevin Hassett is reportedly the leading candidate for Fed Chair when Jerome Powell’s term expires next May, according to Bloomberg sources. Hassett is expected to align with Trump's interest rate cutting approach. However, Trump's decisions often change unexpectedly, so the nomination is not confirmed until publicly announced.
• US retail sales increased by 0.2% in September 2025, the smallest rise in four months and below the 0.4% forecast. Notable increases were at miscellaneous store retailers (2.9%) and gasoline stations (2%). Declines occurred in sporting goods (-2.5%), clothing (-0.7%), and electronics (-0.5%). Sales, excluding key sectors for GDP calculation, fell 0.1% versus a 0.6% rise in August.
• US producer prices rose 0.3% in September 2025, rebounding from a 0.1% drop in August and meeting market expectations. Food prices increased by 1.1%, driven by higher meat costs, while energy prices rose 3.5%, boosting goods inflation to 0.9%, the highest in over a year. Service prices remained unchanged. Annual producer price inflation held steady at 2.7%.
• US private employers cut 13,500 jobs weekly in the four weeks to November 8, 2025, up from a 2,500 decline earlier, per ADP Research. Job losses accelerated due to major cuts by companies like Amazon and Target. The November employment report is set for December 3 release.
• US consumer confidence weakened in November amid rising labour‑market and economic concerns, with expectations at their lowest since April and present conditions at a more than one‑year low, while the share expecting income gains over the next six months fell to the lowest since February 2023 and views on current and future business conditions deteriorated.

Key Points

• Equities: US and European stocks extended a Fed rate cut rebound as AI leaders diverged, Asia tracked Wall Street with China firmer.
• Volatility: VIX lower – calmer tone, macro data focus, Fed uncertainty, SPX ±50pt
• Digital Assets: BTC steady near 87–88k, IBIT inflows, ETHA stabilising, alt-coins mixed
• Fixed Income: US treasury yields push lower on weak US data. Gilts yields drop ahead of today’s UK budget announcement
• Currencies: USD and JPY weaker, sterling nervous after firming pre-budget announcement today, NZD surges on RBNZ
• Commodities: Gold and silver nudge higher. Oil bounces from latest test of recent lows