Economics

The financial commentariat has started to point fingers at the easing the Fed has done to date, but to twist Marc Anthony’s famed speech, we come to praise Caeser, not to bury him in criticism.

The greenback sees a second consecutive session of weakness overnight, with DXY seeing some overnight support at the 109.0 handle ahead of CPI (now 109.04, -0.21% from NA close).

A light data calendar to start the week has the market questioning the Fed path after blowout employment numbers in the US on Friday (NFP: 256k vs. consensus 165k). There is currently less than one Fed cut priced this year, and a stronger than expected data backdrop coupled with the near-certainty of tariffs has the market rethinking inflationary risk once again.

Roman Dubczak is joined by CIBC Capital Markets' strategists to recap the key events from the last financial year and share their outlook for 2025. The discussion focuses on the key themes of currency markets, national and global political change, shifts in yield curves and the resulting volatility in financial markets.

Canada is taking steps to gird itself for the battle against a looming tariff threat from the US, and a list of potential retaliatory tariffs on US products is being assembled as a part of that effort.

Around 6:30am, CNN put out an article stating that Trump is considering an emergency declaration to allow for new tariffs, sending the greenback immediately higher.

Global equities and commodity prices are broadly higher this morning amid respite for global growth sensitive assets as the probability of the worst tariff outcomes are lowered. Note that President-elect Trump has a briefing scheduled for 11am EST.

With Parliament’s prorogation and the race underway for a new leader of the Liberal party, Roman Dubczak, Deputy Chair of CIBC Capital Markets, is joined by the Hon. Lisa Raitt, Vice Chair, Global Investment Banking, and Avery Shenfeld, Chief Economist at CIBC, to discuss the implications of the Prime Minister’s announcement, especially in light of President Donald Trump’s upcoming inauguration and the issues surrounding immigration and tariffs.

It was never literally true that all roads led to Rome during that empire’s haydays. But in Canadian politics, the question for market participants is whether all roads now lead to the same destination, a Conservative majority government sometime in 2025.

We are starting the final trading session of 2024 with FX markets largely unchanged and liquidity very thin. A small rebound in US equity futures in the early morning has USD/JPY recovering after selling off in the early Asia session

It’s an awkward day for trading given that liquidity is especially thin between Christmas and New Years. US equity futures are offered into the NA session, but performance over the month has tested the Santa-Claus rally that is typically seen in December.

Another quiet morning, with European equities slightly higher, but US futures lower. Rates are mostly higher across the globe with a bear steepening of most curves.

The holiday period of less-than-normal liquidity officially kicks off today. We suspect price action would be driven by that, amid any last minute year-end flows that could transpire between now and the new year.

We are more than 13 weeks since the first easing move by the Fed, and the 10-year rate is miles above its level back then. We haven’t seen such a trajectory in any of the previous cycles in recent history.

We finish the last big macro week of the year with higher-than-usual volatility as the market is hit by a handful of headlines/data overnight. We expect that macro risk should settle down as we head into the holiday period.

Markets are quiet ahead of the Fed this afternoon, but given that a 25bps cut is widely anticipated, it is unlikely we will see any big market moves.

Roman Dubczak, Deputy Chair, CIBC Capital Markets, sat with Avery Shenfeld, Chief Economist, and Ian de Verteuil, Head of Portfolio Strategy, for a year-end discussion on economic and market trends, focusing on the implications from the results of the US election and their impact on Canadian businesses as we look ahead to 2025.

Global equities are mixed while rates have sold off after the UK’s strong upside surprise on wages. Within G10 FX, GBP is outperforming given the jobs report, while NOK is trailing once again due to weaker oil prices

Global rates and equities are mostly lower to start the day. G10 FX have traded in narrow ranges amid few major events. GBP is among the outperformers amid an upside surprise in December services PMI, while NOK is the underperformer given weaker oil prices.

Tune into Avery Shenfeld's parody of Backstreet Boy’s Everybody, extended version.