Log in to our mid-week North American Markets overview, where we examine current themes in North America and provide an overview of index and currency performance.
Volatility has (relatively) come down from what Traders have been used to since the start of the year.
Without many new regime-changing geopolitical catalysts, Markets are slowly getting back to their usual rhythm. Except for some renewed policies to reduce reliance on the US Dollar and Treasuries, not much has changed, and the Greenback is now way off of its 95.55 lows.
The Greenland Crisis did not develop into a catastrophe, and developments in Iran remain muted (at least for now – Keep a close eye on any news coming from the US-Iran talks).
Hence, participants are now turning back to economic data amid the ever-moving economic and financial puzzle of the US economy.
And the puzzle isn’t an easy one to solve.
Last week sent out a few warnings about a weakening Labor picture for the US through a three-piece combo: weaker ADP Private payrolls, Jobless Claims erasing their progress made through December, and another scary Challenger layoffs report, indicating the highest pace of firing for January since 2009.
But this morning actually reversed the trend, with Non Farm Payrolls surprising massively to the upside (+130K vs 70K exp), sending out conflicting signals to traders. In any case, they will only be able to place decisive orders after Friday’s CPI release (8:30 A.M.).
Discarding the gigantic downward -858K revisions in NFP since March 2025, the US curve actually took out some of the premium pricing for Fed Cuts throughout the year, particularly during the mid-2026 meetings. The picture will be clearer at the end of the week.
On the Northern Border, the Bank of Canada just released its minutes, adding further clarity on the current policy stance, seen as more “stimulative side” at 2.25%, providing a floor for current rates.
The committee seems to appreciate that the Core inflation measure has eased further to 2.5% despite supply chain restructuring post-tariffs. Expect to learn more about the issue next Tuesday, when the Canadian CPI is released.
Nevertheless, the BoC expects slow growth (1.1% GDP expected in end 2026), so traders haven’t yet assessed any hawkish turn in the Central Bank’s policy – something to monitor as more 2026 data is released.
The US-Canada-Mexico agreement (USMCA) remains a potential source of volatility among the North American economies. Get access to the detailed minutes right here.