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Unexpected Surge in US Unemployment Benefits Claims Rattles Markets

A startling jump in claims for Unemployment Benefits out of the US last week caught the markets off guard. Claims leapt to 261,000 from a previous 233,000, surpassing estimated figures of 236,000.

This unexpected surge led traders to hypothesise that the Federal Reserve may abstain from any rate hikes in their forthcoming June meeting. Correspondingly, the 10-year US bond yield dipped from 3.76% to 3.72%.

Dollar Stumbles, Major Currencies CapitaliseBank of Canada Ups Overnight Cash Rate, WTI Oil Slips, and Stocks Rally

The Bank of Canada announced an increase in its Overnight Cash Rate by 25 basis points, taking it to 4.75% from the previous 4.50% during its recent monetary policy meeting. However, the Canadian Loonie was largely unmoved against the Greenback, steadying at 1.3355 compared to the previous 1.3365.


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In the commodities sector, WTI Oil dipped by 2.18% to USD70.95, preventing the Loonie from gaining momentum.


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In Wall Street, stocks rallied. The DOW settled at 33,800 from a previous 33,650 while the S&P 500 saw a 0.58% increase to 4,295. Additionally, Germany’s DAX rose to 16,010 from 15,930.


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Global Treasury Rates, Consumer Credit, and Bank Lending

Global treasury rates were largely subdued. The UK 10-year Gilt yield slightly declined to 4.23% from 4.25%, while Australia’s 10-year bond rate inched upwards to 4.01% from yesterday’s 3.99%.

Other important economic data released indicated US Consumer Credit (m/m) scaled to USD23 billion against expectations of USD 22.2 billion. Meanwhile, Japan’s Bank Lending (y/y) rose to 3.4% from 3.2%, surpassing estimates of 3.1%.

The Eurozone Final Employment Change in Q1 matched median forecasts at 0.6%, mirroring the previous quarter’s figure. Additionally, French Private Payrolls exhibited a rise to 0.4% in Q1 from 0.2% in the prior period.

“If you don’t feel that you haven’t read enough, you haven’t read enough.” – Nassim Nicholas Taleb

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