USD / CAD - Canadian dollar in park

- US NFP data for October and November due tomorrow.

- US dollar inches lower in quiet overnight session.

USDCAD open: 1.3775, overnight range 1.3758-1.3777, close 1.3774, WTI 57.12, Gold 4337.72.

The Canadian dollar is trading sideways in a narrow range, with traders awaiting todays Canadian inflation report and tomorrow’s US employment data.

Canada CPI is expected to have risen to 2.4% from 2.2% y/y but it isn’t a big deal as that headline number is well-within the BoC inflation range of 1-3%. Tuesday’s US data carries more weight for USDCAD direction.

Fed Chair Powell managed to increase the importance of the twin October-November NFP reports last week when he said, “We think that there is an overstatement in these numbers.” Apparently, Fed staffers estimate that the economy has been shedding about 60,000 jobs each month.

WTI oil sank in a 57.37-58.19 band because of concerns that a Ukraine Russian peace deal would see additional Russian oil supplies as sanctions get repealed.

A busy week of central bank decisions lies ahead. The Bank of England is expected to kick things off on Thursday with a widely anticipated 25 bp rate cut to 3.75%. The ECB follows, where President Lagarde is likely to justify keeping rates unchanged. The Bank of Japan is also expected to raise rates, lifting its benchmark to 0.75%. Policy decisions from Sweden’s Riksbank and Norway’s Norges Bank round out the schedule.

Asian equity markets were mixed. Japan’s Topix edged 0.22% higher, while Hong Kong’s Hang Seng fell 1.34% and Australia’s ASX 200 declined 0.72%, pressured by a weak Wall Street close and disappointing data from China.

As of 7:30 am, the CAC 40 had gained 1.13%, the FTSE 100 was up 0.92%, the DAX rose 0.45% higher and S&P 500 futures were up 0.49%. The US Dollar Index was holding at 98.24 and the US 10-year Treasury yield was 4.161%, and gold.

EURUSD traded in a 1.1727-1.1756 range and was sitting near the top of that band in subdued conditions. Limited news flow and the wait for US labour data kept activity light, though the euro found modest support after industrial production rose 0.8% in October, beating expectations and improving from September’s 0.2% gain.

GBPUSD traded in a 1.3355-1.3593 range as markets positioned for a likely 25 bp Bank of England rate cut to 3.75%. Sterling could still react positively if positioning proves extreme, with CFTC data showing short positions near decade highs. A less dovish message than expected could trigger an aggressive short-covering move.

USDJPY traded in a 154.85-155.99 range but slipped toward the lower end after Tankan survey results pushed expectations for a Bank of Japan rate hike this week above 90%. Governor Kazuo Ueda has reinforced those expectations by highlighting the importance of upcoming wage negotiations.

AUDUSD traded in a 0.6639-0.6656 range and moved sideways through the session. Broad US dollar softness offered some support, though gains were limited by weaker-than-expected Chinese economic data.

There are no notable US reports today.