The Morning Update

The USD weakens, oil prices strengthen, equity markets are mixed, and US yields rise amid ongoing fears of a recession in the US. The USD remains under pressure, down nearly 5% year to date as investors favour the euro and safe-haven currencies, as concerns about a tariff-driven slowdown in US economic growth rattle the markets. Global equities are mixed, as Asian markets face pressure, while the German and French markets gained, and US futures edged up after the Nasdaq 100 rose following its most significant slump since 2022. “In the short-term, it remains difficult to advocate buying dips, with the bear case holding more weight,” said Brown, senior research strategist at Pepperstone. “Growth expectations continue to slide, dragging earnings expectations lower alongside, all the while policy uncertainty clouds the outlook, and as a ‘Fed put’ remains about as elusive as one from the White House.” Elsewhere, Bitcoin snaps a 5-day losing streak, up +3% in early trading, while oil prices firm despite growth concerns. Intraday investors will focus on the US JOLTS Jobs openings ahead of Wednesday’s critical US inflation report.

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In the news. Canada's steel and aluminum set to be hit with 25% US tariffs at midnight. Global markets steady after slowdown fears hit Wall Street. Ukraine will need to make territorial concessions for peace deal, Runio says. Argentina's Milei signs decree paving way for IMF loan deal. NATO urges the EU and Turkey to deepen ties. Portugal's government on brink of collapse, as PM Montenegro likely to lose confidence vote Tuesday. US could reach deal with Canada that avoids oil and gas tariffs, US energy secretary says. Ukraine targets Russia with record drone waves as US pushes talks. As Ontario hikes costs of electricity exports, Lutnick says more tariffs are coming.

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In currency markets. The USD continues under pressure, while JPY stalls after testing 5-month highs, up over 4.5% monthly. Euro continues to strengthen, continuing to benefit from German borrow and spend strategy. CNY strengthens by 0.4%, while Asian currencies on average are up modestly by 0.1% against the USD. Trading currencies benefit by a weaker USD, with JPY & CHF down 0.2%, AUD, MXN, NZD up 0.15%, ZAR gained by 0.4%, SEK strengthened by 0.65%, and NOK rallied 0.8% against the USD.

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In commodity markets. Oil & Gold prices firmed by 0.6%. Natural Gas & Soybean prices up 0.35%. Silver & Copper prices rallied by 1.25%. Wheat prices weakened by 0.6%, and Soybean prices gained by 0.3%.

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CAD remains stable but is unable to take advantage of the USD’s weakness as investors remain cautious amid ongoing tariff uncertainty. We anticipate that investors will stay on the sidelines today ahead of the BoC interest rate decision and the US inflation report on Wednesday. We expect the loonie to remain under pressure as we await updates on the timing of a federal election and the potential for tariff rollouts in April. Intraday US jobs data will offer some direction for the loonie.

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EURCAD continues to rally as the euro remains the darling of investors in the perfect storm of US/Canada trade war and Germany's favourable overhaul of borrowing and spending strategy.

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EUR continues to rise toward 1.0900 as US economic concerns grow. The combination of USD weakness and optimism that the German Greens will reach a compromise allows for the overhaul of Germany’s borrow-and-spend strategy to proceed. We expect investors to be sidelined ahead of Wednesday’sUS inflation report, which will help provide direction for the Fed’s next move.

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GBPEUR remains under pressure, down nearly 1% monthly as the EU moves to increase defence spending.

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GBP extends gains through 1.2900 amid continuing USD weakness. The pound continues to benefit from increasing concerns of a US recession from Trump's tariff strategy, which has seen the USD tumble nearly 5% in 2025. This week investors will be focused on the Ukraine peace talks, the US inflation report on Wednesday and the UK's GDP, Manufacturing and Industrial production reports on Friday. Intraday, the US JOLTS Jobs may support the GBP if the report misses expectations.