S&P 500 holds near highs, but Fed cuts could spark short-term volatility before medium-term bullish momentum resumes.
USD/CAD is trading near 1.3850, sitting close to its mid-August lows as weak Canadian data continues to weigh. If support gives way, eyes turn toward 1.3750 as the next key level. On the upside, resistance sits around 1.3950–1.4000.
The latest jobs report showed a loss of roughly 65,500 jobs in August, pushing the unemployment rate up to 7.1% — its highest level since 2016 outside of the pandemic. The weakness was broad-based, hitting transportation, manufacturing, and professional services. Combined with softer inflation readings, markets are increasingly confident the Bank of Canada will pivot toward easing in the months ahead.
Crude oil has provided some support, but not enough to offset the hit from labor weakness and BoC repricing.
The dollar has been subdued following softer U.S. CPI and a jump in jobless claims — now at nearly a four-year high. Payroll revisions have further highlighted cracks in the labor market. Fed funds futures now price around 75 bps of cuts by year-end, suggesting one cut at each of the three remaining FOMC meetings starting next week.
S&P 500 holds near highs, but Fed cuts could spark short-term volatility before medium-term bullish momentum resumes.
DXY holds near support as traders await FOMC, with three cuts priced and data setting the next move.
Sterling stalls at resistance as soft UK growth data shifts attention to next week’s BoE meeting and balance sheet risks.
