RBI Holds Repo Rate at 5.25% as Inflation Risks and Global Uncertainty Persist 
Urban studies: Doing research when every city is different 
RBA Signals More Rate Hikes Possible as Australia Battles Stubborn Inflation 
Fed Holds Interest Rates Steady as Kevin Warsh Says Rising Treasury Yields Tighten Financial Conditions 
Is Netanyahu’s star waning in Washington? His latest meeting with Trump suggests it may be 
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
SpaceX Earnings Preview: Bernstein Says 4 Key Factors Will Drive Long-Term Valuation 
Chile Central Bank Holds Interest Rate at 4.5% as Inflation and Global Risks Persist 
BOJ Expected to Hold Rates Steady While Signaling More Hikes Ahead 
Brazil Cuts Selic Rate to 14% as Inflation Eases but Risks Persist 
Ukraine’s drone strikes are having an impact on Russia — but Russian leaders remain committed to war 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
The bearish USDCAD scenarios (below 1.28) driven by:
- BoC indicates an intention to normalize rates earlier due to an improved global outlook.
- Global demand pushes oil prices to $50 plus and towards $60.
The Bank of Canada has been signaling an imminent rate hike, if not in the July meeting then in September, and this is now priced in. The BoC is giving greater prominence to financial stability concerns stemming from high Canadian household indebtedness and regional housing booms. Although our early 2018 target for USDCAD has been reached, the loonie’s undervaluation should support further appreciation in the months ahead.
While the implied volatility remains among the three lowest G10 vols, seeming options globally inexpensive.
Despite the recent CAD appreciation, the USDCAD realized volatility has remained muted due to the low realized vol environment which makes knock-out barriers attractive.
Two-month USDCAD absolute moves observed on a daily basis since 2013 has been 88% smaller than the current distance between the spot and the KO barrier (690 pips). This makes the KO event unlikely.
Risks are limited to the extent of premium. If USDCAD spot hits the 1.23 barrier at any time before the 2m expiry, the option will expire instantly.
Hence, USDCAD 2m put strike 1.27, knock-out 1.23 Indicative offer: 0.20% (vs 0.48% for the vanilla, spot ref: 1.2947).
