On the other hand, we see weak opening in oil and copper futures, which could partly add pressure on the Loonie. Corporate bids located under 1.3220 while sellers atop 1.3300. There is a $500mio worth of FX options strike 1.3250 maturing today.
From our strategist Patrick Bennett: This escalation or rekindling (pun intended) of trade spats, this one US/Canada on lumber is not welcome by markets, even if this particular issue is not new. There has been a feeling that the hard line on trade had softened slightly. But even still, NAFTA is still being talked about. More important for Cad at present is a clear pickup in activity that is bullish for the currency.
Little seen in EurUsd and GbpUsd.
Some media said the market is relieved by Italian banks rescue but some are skeptic. Ambrose Evans-Pritchard in The Telegraph said had Brussels and Frankfurt let Italy nationalise Veneto Banca and Banca Popolare di Vicenza on flexible terms two years ago, the crisis could have been contained with less damage to the Italian economy and at far lower cost to the state. Whether or not the worst is over, one thing is clear: this is no way for Europe to run a banking union. This is echoed by Financial Times, that there is there is a growing view among many politicians and officials in Brussels that the system has been damaged as a result, with MEPs warning that the credibility of the Eurozone banking union is under threat.
British PM Theresa May used Gbp1bn to gain coalition with the DUP. Telegraph wrote SNP reacted by immediately demanding more money for Scotland, while the Welsh government claimed it should be given £1.7bn to achieve parity with Ulster.
There has been very strong demand for AudUsd this morning. We think partly on back of AudJpy, recovering above the 85.00 level. AudUsd took out the 0.7600, big level at 0.7645 awaits. Meanwhile, iron ore futures up 2%.