Log in to our mid-week North American Markets overview, where we examine the current themes in North America and provide an overview of indices and currency performances.
We are now halfway through the week, and the main storyline has shifted squarely toward the US government shutdown, which has sparked a sharp N-shaped (for nope) reversal in the US Dollar.
The greenback had been climbing steadily after a streak of upbeat economic data — GDP, jobless claims, and Powell’s more balanced-than-dovish tone last week pushed the DXY to fresh highs near 98.60.
But shutdown rumors quickly flipped the narrative, triggering heavy selling pressure in the reserve currency, currently trading almost one full-handle below.
That decline only deepened with today’s disappointing ADP employment release, while safe-haven flows steered further toward metals, with gold coming $5 off the $3,900 level.
US equities have also largely shrugged off any negative outlook from the shutdown, as all three indices are potentially on track to reach new all-time highs.
North of the border, Canada’s macro picture continues to underwhelm.
Retail sales and household consumption are rising, but this morning’s Manufacturing PMI, at 47.7, showed contraction yet again.
Meanwhile, the newly released Bank of Canada minutes confirmed that all members supported the recent cut to 2.50%. Markets now price a 55% chance of another 25 bps cut at the October 29 meeting.
You can access the report right here.
So, with the US shutdown shaking confidence in the dollar and Canadian data still soft, attention now shifts to whether metals and risk assets can maintain their momentum with the NFP data almost surely getting delayed.
Let’s take a look at the charts.