U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
Federal Reserve Faces Subpoena Delay Amid Investigation Into Chair Jerome Powell 
Markets React as Tensions Rise Between White House and Federal Reserve Over Interest Rate Pressure 
New York Fed President John Williams Signals Rate Hold as Economy Seen Strong in 2026 
MAS Holds Monetary Policy Steady as Strong Growth Raises Inflation Risks 
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes 
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
Urban studies: Doing research when every city is different 
Bank of England Expected to Hold Interest Rates at 3.75% as Inflation Remains Elevated 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
Japan Declines Comment on BOJ’s Absence From Global Support Statement for Fed Chair Powell. Source: Asturio Cantabrio, CC BY-SA 4.0, via Wikimedia Commons 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
Bank of America Posts Strong Q4 2024 Results, Shares Rise 
We are near-term neutral EUR despite a resolute ECB given softer data. ECB is a long way from hiking and trade tensions are worsening. On the flip side, NAFTA has become the dominant driving force for CAD in the near-terms, as the negotiation process has seemed to enter its end stage.
Technically, on a broader perspective, EURCAD’s major trend spikes through rising channel, but shooting star pops-up at stiff resistance at 1.5585 and 21EMAs, and hammer patterns at channel support (refer weekly plotting), both leading and lagging indicators signal faded strength. You could very well observe as and when the prices touched channel baseline and top line, the price pattern behaves in an adverse way.
EURCAD outlook:
While 1m IV skews have been well balanced on either side and signify the hedgers’ interests on both OTM call and put strikes. While the combination of 2w bearish neutral remains intact with shrinking IVs are conducive for writing any overpriced OTM calls. Use of three-legs option strategy would be a smart move to reduce hedging cost.
Options Strategy:
Contemplating above driving forces and OTC indications, we advocate initiating longs in 1M EURCAD at the money -0.49 delta put, and go long in at the money +0.51 delta call of similar expiry and simultaneously, short 2w (1%) out of the money calls. Thereby, we favor slightly on downside risks as short leg likely to reduce long legs.
Currency Strength Index: FxWirePro's hourly EUR spot index is flashing at 47 (which is bullish), while hourly CAD spot index was at -84 (bearish) at 14:04 GMT. For more details on the index, please refer below weblink:
