Author: TSX Stocks

Bombardier Announces April 3, 2025 as the Start of its New Normal Course Issuer Bid


Bombardier Announces April 3, 2025 as the Start of its New Normal Course Issuer Bid – Toronto Stock Exchange News Today – EIN Presswire




















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B2Gold Announces TSX Approval for Normal Course Issuer Bid


B2Gold Announces TSX Approval for Normal Course Issuer Bid – Toronto Stock Exchange News Today – EIN Presswire




















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Rash AI deregulation puts financial markets at high risk

As Canada moves toward stronger AI regulation with the proposed Artificial Intelligence and Data Act (AIDA), its southern neighbor appears to be taking the opposite approach.

AIDA, part of Bill C-27, aims to establish a regulatory framework to improve AI transparency, accountability and oversight in Canada, although some experts have argued it doesn’t go far enough.

Meanwhile, United States President Donald Trump is pushing for AI deregulation. In January, Trump signed an executive order aimed at eliminating any perceived regulatory barriers to “American AI innovation.” The executive order replaced former president Joe Biden’s prior executive order on AI.

Notably, the US was also one of two countries — along with the UK — that didn’t sign a global declaration in February to ensure AI is “open, inclusive, transparent, ethical, safe, secure and trustworthy.”

Eliminating AI safeguards leaves financial institutions vulnerable. This vulnerability can increase uncertainty and, in a worst-case scenario, increase the risk of systemic collapse.

The power of AI in financial markets

AI’s potential in financial markets is undeniable. It can improve operational efficiency, perform real-time risk assessments, generate higher income and forecast predictive economic change.

My research has found that AI-driven machine learning models not only outperform conventional approaches in identifying financial statement fraud, but also in detecting abnormalities quickly and effectively. In other words, AI can catch signs of financial mismanagement before they spiral into a disaster.

In another study, my co-researcher and I found that AI models like artificial neural networks and classification and regression trees can predict financial distress with remarkable accuracy.

Artificial neural networks are brain-inspired algorithms. Similar to how our brain sends messages through neurons to perform actions, these neural networks process information through layers of interconnected “artificial neurons,” learning patterns from data to make predictions.

Similarly, classification and regression trees are decision-making models that divide data into branches based on important features to identify outcomes.

Our artificial neural networks models predicted financial distress among Toronto Stock Exchange-listed companies with a staggering 98% accuracy. This suggests AI’s immense potential in providing early warning signals that could help avert financial downturns before they start.

However, while AI can simplify manual processes and lower financial risks, it can also introduce vulnerabilities that, if left unchecked, could pose significant threats to economic stability.

The risks of deregulation

Trump’s push for deregulation could result in Wall Street and other major financial institutions gaining significant power over AI-driven decision-making tools with little to no oversight.

When profit-driven AI models operate without the appropriate ethical boundaries, the consequences could be severe. Unchecked algorithms, especially in credit evaluation and trading, could worsen economic inequality and generate systematic financial risks that traditional regulatory frameworks cannot detect.

Algorithms trained on biased or incomplete data may reinforce discriminatory lending practices. In lending, for instance, biased AI algorithms can deny loans to marginalized groups, widening wealth and inequality gaps.

In addition, AI-powered trading bots, which are capable of executing rapid transactions, could trigger flash crashes in seconds, disrupting financial markets before regulators have time to respond.

The flash crash of 2010 is a prime example where high-frequency trading algorithms aggressively reacted to market signals causing the Dow Jones Industrial Average to drop by 998.5 points in a matter of minutes.

Furthermore, unregulated AI-driven risk models might overlook economic warning signals, resulting in substantial errors in monetary control and fiscal policy.

Striking a balance between innovation and safety depends on the ability for regulators and policymakers to reduce AI hazards. While considering the financial crisis of 2008, many risk models — earlier forms of AI — were wrong to anticipate a national housing market crash, which led regulators and financial institutions astray and exacerbated the crisis.

Blueprint for financial stability

My research underscores the importance of integrating machine learning methods within strong regulatory systems to improve financial oversight, fraud detection and prevention.

Durable and reasonable regulatory frameworks are required to turn AI from a potential disruptor into a stabilizing force. By implementing policies that prioritize transparency and accountability, policymakers can maximize the advantages of AI while lowering the risks associated with it.

A federally regulated AI oversight body in the US could serve as an arbitrator, just like Canada’s Digital Charter Implementation Act of 2022 proposes the establishment of an AI and Data Commissioner.

Operating with checks and balances inherent to democratic structures would ensure fairness in financial algorithms and stop biased lending policies and concealed market manipulation.

Financial institutions would be required to open the “black box” of AI-driven alternatives by mandating transparency through explainable AI standards — guidelines that are aimed at making AI systems’ outputs more understandable and transparent to humans.

Machine learning’s predictive capabilities could help regulators identify financial crises in real time using early warning signs — similar to the model developed by my co-researcher and me in our study.

However, this vision doesn’t end at national borders. Globally, the International Monetary Fund and the Financial Stability Board could establish AI ethical standards to curb cross-border financial misconduct.

Crisis prevention or catalyst?

Will AI still be the key to foresee and stop the next economic crisis, or will the lack of regulatory oversight cause a financial disaster? As financial institutions continue to adopt AI-driven models, the absence of strong regulatory guardrails raises pressing concerns.

Without proper safeguards in place, AI is not just a tool for economic prediction — it could become an unpredictable force capable of accelerating the next financial crisis.

The stakes are high. Policymakers must act swiftly to regulate the increasing impact of AI before deregulation opens the path for an economic disaster.

Without decisive action, the rapid adoption of AI in finance could outpace regulatory efforts, leaving economies vulnerable to unforeseen risks and potentially setting the stage for another global financial crisis.

Sana Ramzan is assistant professor in Business, University Canada West

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Avicanna Announces Late Filing of Financial Statements and Application for Management Cease Trade Order


Avicanna Announces Late Filing of Financial Statements and Application for Management Cease Trade Order – Toronto Stock Exchange News Today – EIN Presswire




















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Product roundup: J.P. Morgan Asset Management expands its ETF lineup

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J.P. Morgan Asset Management (JPMAM) has launched its second batch of ETFs in Canada.

The JPMorgan US Value Active ETF (TSX: JAVA) and JPMorgan US Growth Active ETF (TSX: JGRO) hit the Toronto Stock Exchange on March 25. Their management fees are 0.44%.

JPMAM has promoted the products as a potential yin-and-yang combo. JAVA aims to identify companies at “attractive valuations” within a pure large-capitalization value portfolio, while JGRO seeks to identify “underappreciated growth opportunities,” primarily in large-cap companies but with flexibility to invest across the market capitalization spectrum.

Both products are actively managed, which gives their portfolio management teams the ability to be selective about the companies they invest in and how they weight the portfolios to those companies during this period of economic uncertainty and market volatility, said Travis Hughes, head of Canada with JPMAM.

“In this current environment … active management really has the opportunity to shine through,” he said in an interview.

“And it’s difficult, if not impossible, to predict the future, but both of these portfolio management teams have managed money in very volatile times, whether it be the Great Financial Crisis or the dot-com bust in the early 2000s.”

JAVA will focus on sectors such as financials, health care and industrials, where “value has been out of favour over the course of the last 10 years, as we’ve seen the growth side of the market do so well,” Hughes noted. It holds 161 stocks, including Wells Fargo & Co., Berkshire Hathaway Inc. and UnitedHealth Group Inc.

Meanwhile, JGRO will focus on sectors like tech, communication services and consumer discretionary. The fund can “move up and down the cap structure … so it gives you exposure to those more growth-centric names, but a little more diversification than what you would see in a passive Russell 1000 Growth [Index] strategy,” he said. The Magnificent Seven are among its 114 holdings.

Asked whether JPMAM is worried about launching U.S. equity ETFs at a time when there are reports of Canadian investors dumping U.S. equities amid the ongoing trade war between Canada and the U.S., Hughes said while the firm is mindful of investor sentiment in the country, it’s taking cues from its institutional and asset allocator clients.

“We’ve developed a product strategy and roadmap that was really informed by our clients of what we should bring to the market, and we’re not going to waver on that,” he said.

He also noted that U.S. equities still make up as much as 70% of the global equity market.

“So, while I do understand that some investors will be rebalancing their portfolios, for the most part, we believe that U.S. equities will continue to make up a large part of investor portfolios,” Hughes said.

The new ETFs come just months after JPMAM entered Canada’s ETF industry.

The firm plans to further grow its product offerings and headcount in the country, which currently sits at 40 JPMAM employees, Hughes said. New ETFs are also in the pipeline.

“We’ll probably add five to six [employees] over the course of the next few months, and continue to invest in the talent that will support this business,” he said.

The firm plans to “methodically and consistently bring new ETFs to market over the course of this year and next,” Hughes added. “We have some plans for the summer, some plans for the fall, as well as the spring and summer of 2026.”

JPMAM does not have specific assets under management goals, Hughes noted, but it aims “to continue to bring what we believe are best-in-class global capabilities to the Canadian market.”

CI GAM looks to extend reach of two private markets funds

CI Global Asset Management (CI GAM) has tweaked to two of its private markets funds in hopes of extending their reach to more Canadian accredited investors.

As of April, the CI Private Markets Growth Fund and CI Private Markets Income Fund are to begin offering a Canadian-dollar purchase option in addition to the existing U.S. dollar purchase option.

Investments through the Canadian-dollar purchase option will not be hedged, the firm said in a release.

Also, the funds will switch to a monthly subscription schedule and monthly pricing, replacing the current quarterly schedule. This will mean that capital will be invested in the funds on the last business day of each month, otherwise known as the subscription date, and the funds will be priced monthly.

On pricing, CI GAM noted: “The net asset value (“NAV”) per unit will be struck for the last business day of each month and the NAV for each fund is expected to be available on or about the last business day of the following month. Currently, the funds are priced on a quarterly basis.”

CC&L Funds announces new fund, fund name change 

Connor, Clark & Lunn Funds Inc. (CC&L Funds) has announced the creation of a fund as well as a name change for another fund.  

In a release, the firm said its newly launched PCJ Focused Opportunities Fund is modelled after an existing institutional strategy that “seeks to deliver an attractive long-term growth profile by taking long and short positions” in North American equities. The fund is managed by PCJ Investment Counsel Ltd. and has a medium risk rating. 

Also, CC&L Funds has renamed the CC&L Alternative Income Fund to CC&L Absolute Return Bond Fund. 

RBC GAM sets target maturity date for four ETFs

Four fixed-income ETFs from RBC Global Asset Management Inc. (RBC GAM Inc.) are slated to mature this fall.

The RBC Target 2025 Canadian Government Bond ETF (TSX: RGQN), RBC Target 2025 Canadian Corporate Bond Index ETF (TSX: RQN) and RBC Target 2025 U.S. Corporate Bond ETF (TSX: RUQN) (TSX: RUQN.U) will mature on or about Sept. 12, 2025, a release said.

RBC GAM Inc. said it will confirm final maturity details around that date. Unitholders will receive further details at least 60 days before the maturity date.

ATB announces risk rating change

ATB Investment Management Inc. has changed the risk rating for its Compass Maximum Growth Portfolio from “low to medium” to “medium.”

“The change is a result of the firm’s annual risk rating review and renewal process and not the result of any alterations to the investment objective, strategy or management of the fund,” a release said.

Firms make fund name changes

Two firms have announced name changes for their funds.

Desjardins Investments Inc. has renamed the Desjardins Alt Long/Short Equity Market Neutral ETF Fund to the Desjardins Market Neutral ETF Fund.

In a release, the firm said the change is part of a broader step the firm is taking to streamline its ETF names and better differentiate them within Desjardins Investments’ lineup of alternative ETFs.

This change is subject to regulatory approval.

On the other hand, Russell Investments Canada Limited said the Russell Investments Inflation Linked Bond Fund will be renamed to the Russell Investments Long Duration Bond Fund, effective April 1.

In a release, the firm said the fund’s new investment objective “will be to provide a stable level of interest income by gaining exposure primarily to longer-dated government bonds.”

The fund’s risk rating will remain the same.

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Noushin Ziafati

Noushin has been the associate editor of Advisor.ca since 2024. Previously, she worked at outlets including the CBC, Canadian Press, CTV News, Telegraph-Journal and Chronicle Herald. Reach her at noushin@newcom.ca.

TSX set for monthly loss as Trump’s tariff announcement nears

TSX set for monthly loss as Trump's tariff announcement nears

Business

TSX set for monthly loss as Trump’s tariff announcement nears


22:38:38 PKT

(Reuters) – Canada’s main stock index fell on Monday, dragged by information technology stocks, as investors shunned risky assets amid concerns that US President Donald Trump’s upcoming tariffs will hurt the global economy.

Toronto Stock Exchange’s S&P/TSX composite index was down 0.2% at 24,686.72 points, and is poised to decline nearly 3% this month, if losses hold.

Global stocks plunged after Trump said on Sunday the reciprocal tariffs he is expected to announce on Wednesday will include all nations, adding to existing levies on aluminum, steel, autos and a range of Chinese goods.

“We’ve got that big fear that there could be a lot of tariffs implemented on Wednesday”, said Colin Cieszynski, chief market strategist at SIA Wealth Management.

While Canada had secured protections against new US auto tariffs, including a 60-day delay and annual duty-free quotas, under a 2018 trade agreement with the US and Mexico, there’s no evidence Trump will honor those commitments.

However, the Canadian government expects the US to honor the agreements on Wednesday.

Information technology led declines, down 2.6% to its lowest in five months, with electronic equipment company Celestica falling 7.2% to the bottom of the benchmark index.

Meanwhile, heavy-weight energy climbed 1.4%, tracking crude prices, spurred by Trump’s threat to impose secondary tariffs on buyers of Russian oil and a warning of possible military action against Iran.

Consumer staples gained 1.3% with Metro rising 2% after the food and pharmacy retailer said it prioritizes local products amid the “Buy Canadian” movement.

Gold prices reached a fresh record high, as worries about potential inflation pressures due to US tariffs put the safe-haven asset on track for its strongest quarter since 1986.

“Gold helps to cushion the Canadian market a bit, as we’ve seen this over the last few days that Canada has gone down less than the US as the heavily weighted gold sector benefits from this uncertainty”, Cieszynski added. 

International Petroleum Corp. Annual General Meeting to be held on May 7, 2025


International Petroleum Corp. Annual General Meeting to be held on May 7, 2025 – Toronto Stock Exchange News Today – EIN Presswire




















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A$19.5m Raised in Strongly Supported Placement

ANNOUNCEMENT TO THE TORONTO STOCK EXCHANGE AND AUSTRALIAN SECURITIES EXCHANGE

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CEO of National Bank of Canada meets NBC Governor,  highlights support for Cambodian banking sector

On 19 March 2025, the delegation of National Bank of Canada and representatives of ABA Bank paid a courtesy visit to the National Bank of Cambodia, highlighting its ongoing support of Cambodia’s banking sector development. National Bank of Canada is one of the largest banks in Canada and the shareholder of ABA Bank, the largest Cambodian commercial bank.

Led by Laurent Ferreira, President and CEO of National Bank of Canada, the delegation was warmly received by H.E. Dr. Chea Serey, Governor of the National Bank of Cambodia. The meeting bore fruitful discussions as parties went over various topics, including digital transformation, green finance, vast investment opportunities, and the role ABA has been playing in developing the country’s economy and attracting investors to the Kingdom.

During the meeting, Laurent Ferreira commended the National Bank of Cambodia’s unwavering efforts in the country’s financial development and highlighted its excellence in facilitating economic growth.

With that belief in mind, since 2014, National Bank of Canada has invested USD 900 million and reinvested all of ABA’s profit into strengthening its capital base, reinforcing ABA’s dedication to Cambodia’s sustainable growth and development.

“National Bank of Canada values the opportunity to operate in Cambodia through its full subsidiary, ABA Bank,” commented Laurent Ferreira. “Cambodia’s thriving economy and business-friendly environment provided fertile ground for ABA’s growth. Since our investment in 2014, ABA Bank, led by a competent leadership and dedicated staff, has flourished, validating our trust in Cambodia’s supportive business climate,” he concluded.

In time, ABA has evolved into a robust financial institution, supporting Cambodia’s economic growth. The Bank has extended $8.6 billion in loans to key economic sectors, including trade, tourism, manufacturing and agriculture.

ABA is also actively financing infrastructure projects for the country’s development. Recent financing include green bonds supporting a solar farm project, which will provide Cambodia with cheaper electricity, lowering production costs and boosting the country’s regional competitiveness. Additionally, ABA provided financing to Techo International Airport. This transformative project will boost Cambodia’s economic connectivity and drive growth in tourism and logistics.

Laurent Ferreira mentioned that the successful example of National Bank of Canada’s investing in a Cambodian bank enhances Cambodia’s profile in Canada as an attractive investment destination. National Bank of Canada actively promotes Cambodia to its customers seeking international expansion, reinforcing confidence in the Kingdom’s potential.

In August 2024, National Bank of Canada was key in facilitating high-level meetings between Cambodian government officials and Canadian private sector leaders and investors. The Investment Roadshow, led by His Excellency Sun Chanthol, showcased Cambodia’s promising investment landscape in the U.S. and Canada.

ABA Bank is proud of the recent meeting between the delegation of National Bank of Canada and the Governor of the National Bank of Cambodia, bolstering its dedication to supporting the country’s banking sector through innovative banking services and a customer-centric approach.

As the Cambodian banking sector regulator, the National Bank of Cambodia is crucial in ensuring financial stability, fostering innovation, and guiding sustainable growth. ABA Bank deeply appreciates NBC’s continuous guidance and visionary leadership, which has been instrumental in the Bank’s development and success.

ABA Bank’s journey is intrinsically linked to Cambodia’s prosperity. The bank remains dedicated to building a strong, sustainable banking sector that aligns with the country’s long-term development goals. With the continued support of the Royal Government of Cambodia, ABA looks forward to realizing the shared vision for a more prosperous and financially inclusive Cambodia.

About ABA Bank 

ABA Bank (www.ababank.com) is Cambodia’s largest commercial bank by assets, deposits, loans, and profitability, according to the Annual Supervision Report 2021-2023 of the National Bank of Cambodia. 

The Bank’s wide-reaching footprint covers 99 branches, 46 self-banking spots, 1,700+ self-banking machines, and advanced online and mobile banking platforms, providing more than 4.5 million customers with the convenience of modern financial services.

ABA Bank is a subsidiary of National Bank of Canada, one of the largest banks in Canada.

About National Bank of Canada

National Bank of Canada (www.nbc.ca) is a financial institution with around USD 334 billion in assets as of 31 January 2025 and a vast network of correspondent banks worldwide. National Bank of Canada holds credit ratings of “A” from S&P, “A+” from Fitch, and “A1” from Moody’s.

It is headquartered in Montreal and has branches across Canada, serving 2.8 million clients. National Bank of Canada is the leading bank in Quebec, where it is the partner of choice among SMEs.

The bank’s securities are listed on the Toronto Stock Exchange (TSX: NA). Clients in the United States, Europe, and other parts of the world are served through a network of representative offices, subsidiaries, and partnerships.

April 2025 Monthly

Businessman, Internet, Continents

Image Source: Pixabay

The world is different. After a four-year restoration of the traditional globalist US elite, a majority of the American electorate seems to have rejected it. President Trump is indeed a transformational president, and his reversal of many traditional elements of US domestic and foreign policy are triggering dramatic action in other parts of the world. 

Many Americans and European had been critical of Germany’s self-imposed fiscal strait jacket In March, Berlin adopted a 500 bln euro infrastructure campaign and will no longer include military spending in the calculation of the debt break.

The European Commission is moving to allow members to have greater fiscal leeway. The UK’s Labour government has opted to boost defense spending by cannibalizing its foreign aid budget. The Polish government is seeking nuclear weapons, either its own or foreign deployment. By the end April, Europe is expected to announce a “reassurance force” for Ukraine. Several countries have offered some trade concessions in hope of avoiding, or at least minimizing, US tariffs. 

The UN vote, which for the first time the US sided with Russia, Iran, and China over Europe on a security issue, signals the greatest crisis in the Atlantic alliance since at least the Suez Crisis (1956). The territorial overture to Greenland, part of NATO-member Denmark, sparked some talk of the deployment of European forces, whose purpose would not be to deter China or Russia. Trump’s actions and threats have given UK Prime Minister Starmer an excellent opportunity to re-boot the UK-European relationship post-Brexit.

Trump’s harassment of Canada, a member of the British commonwealth, though Starmer and apparently King Charles did not raise this issue in defense Canada in talks with Trump, shifted the balance in Canadian politics. Trudeau was in a precarious position and his resignation as Liberal Party leader was driven by domestic developments and considerations.

However, Carney, the former governor of both the Bank of Canada and the Bank of England is the new prime minister and Liberal Party voters appeared to see him as the most capable to deal with Trump. Conservative Party leader Poilievre was running ahead in the polls but now the Liberals under Carney seem more likely to win the April 28 election. Regardless of the election outcome, the US insult and threat will likely spur Canada to develop closer ties with Europe and is reportedly fueling consumer and tourist boycott in both.

Trump’s key claim is that America’s traditional allies have taken advantage of it more than its traditional rivals. His wrath appears more aimed at them that Russia or China. He asserts that the EU was created to “screw” the US, though the historical record tell as different story, and US officials often encouraged the integration of Europe, even as it pushed back against proposals for a European army or dollar rival.

Many Americans do seem to believe that the chronically large trade deficits reflect unfair foreign trade practices that are making the US poorer. Yet, it is difficult to square this with the economic data. It is true that the US has been running a current account deficit since 1982, while Japan has been reporting a surplus since 1981 and Germany since 2002. Yet, the US economy has consistently outperformed them. US real GDP per capita rose at an annual rate of 1.8% between 1980 and 2023. In contrast, real per capita GDP rose at 1.4% pace in Germany and 1.5% in Japan.

Moreover, a significant portion of US imports come from the foreign affiliates of US-headquartered companies. For historical reasons, US companies pursued a strategy foreign direct investment strategy rather than a traditional export-oriented approach to serve foreign demand. Since the US data began more than 60 years ago, sales by affiliates of US multinationals outstripped US exports by magnitudes. 

To be sure, and contrary to conventional wisdom, the critical driver is not cheap labor. After all, US foreign direct investment and the employment by the affiliates of US companies are greater in the G10 economies than in sub-Saharan Africa. A better explanation is that US foreign direct investment is more likely to be in or near important customers and markets, which are often in higher income economies.

To overcome US and European protectionism of 1980s and a strong yen, Japan auto and parts companies adopted a direct investment strategy as well. They too did not move to sub-Saharan Africa or the interior of South America, or the Caribbean, but also located near their most foreign market, the US. This includes Mexico. 

In his first term, Trump renegotiated the North American Free-Trade Agreement (NAFTA) and replaced it with the USMCA (US, Mexico, Canada Agreement) with more robust domestic content rules, which encouraged US, European and Japanese companies to locate production in the free-trade area. Now, in an apparent reversal, the Trump administration argues near-shoring and friend-shoring are not good enough. Only onshoring will suffice. 

On April 2, the US is expected to announce details of its reciprocal and possibly more sectoral tariff strategy. The administration appears to have two conflicting goals. One is to reduce trade barriers for US goods, promoting exports. The other is to raise revenue to help fund the tax cuts it is pursuing which go beyond simply making permanent the Tax Cuts and Job Program of the first Trump’s first term. The more successful the first is, the less success the second can be.

Bannockburn’s World Currency Index (BWCI), a GDP-weighted basket of the 12 currencies of the 12 largest economies, rose by about 1% in March. It was the third consecutive monthly gain and the largest since November 2023. This reflects the appreciation of nearly all the currencies against the dollar. The South Korean won, which lost about 0.5% was the exception to the generalization. The Japanese yen eked out a minor gain through March 28, and the Chinese yuan was nearly flat. It rose by about 0.2%. 

Among the G10 components, the euro’s 4.1% gain was the strongest, followed by sterling rise of a little more than 3%. Among the emerging market members, the Russian ruble’s nearly 6% advance was the strongest, while the Indian rupee and Brazilian real rose more than 2%. The BWCI peaked on March 18 at a four-month high, the same day the Dollar Index recorded a five-month low. 

The dollar’s weakness in Q1 coincided with a pullback in US equities. European investors bought a record amount of US shares in 2024, which helped lift the greenback. That process seems to have been reversed in this year. Also, interest rate differentials move against the dollar. The US two-year yield fell by about 30 bp, while the German two-year yield slipped by about five basis points and Japan’s two-year yield rose by a little more than 25 bp. Even more dramatic was the 10-year rate moves. The US 10-year yields fell by the around 30 bp, the same as the two-year, but with fiscal expansion plans, eurozone 10-year rates rose 25-35 bp, a little less than 15 bp in the UK, and the 10-year JGB yield increased by a little more than 45 bp. 

U.S. Dollar:Russia’s invasion of Ukraine in 2022 was a shock. Decoupling from China 2023-2024 was another shock. A third shock is emanating from the US as the new administration reverses many traditional positions and launches a trade war, seemingly aimed at US allies, but it is also an assault on US multinational companies’ foreign direct investment strategy that entails servicing foreign demand more by producing locally than exports. The US has suspended its $25 mln financial contribution to the WTO, which is more symbolic than a budget savings. Reciprocal tariffs, which the administration says will take into account not only tariff differentials, but also non-tariff barriers to trade, are to be announced April 2. More sectoral tariffs, including on lumber, copper, semiconductors, and pharma have also been threatened though the dates are no known. The certainty of some tariffs and the uncertainty of others have seen consumer confidence implode. The net result is likely to be weaker growth and firmer prices. Ultimately, we suspect the former will spur the Federal Reserve into resuming its easing cycle that began last year. In addition to tariffs, significant government layoffs and the crackdown on legal immigration will also act as headwind on economic growth. Meanwhile, Canada and Europe appear to be engaged in a consumer boycott against the US, which includes a sharp drop in tourist plans. This could also lead to further deterioration of the US trade balance as tourism is understood to be the export of hospitality services. 

Euro:March may have been turning point for Europe. Faced with growing threats from the United States, the new German government announced a 500 bln euro 10-year infrastructure initiative and removed defense spending from its debt brake. The EU is moving toward granting greater fiscal flexibility to its members, with similar emphasis as Germany–infrastructure and defense. This shift, which reduces the downside tail risks, at the same time as the eurozone composite PMI gradually recovers, spending Q1 25 above the 50 boom/bust level, and German sentiment improves. Eurozone 10-year yields rose by about 30 bp in March but the periphery premium over the core did not increase, as it often does in a rising interest rate environment. The ECB delivered its sixth rate quarter-point rate cut in the easing cycle that began last June. The deposit rate now stands at 2.75%. ECB President Lagarde has suggested the neutral rate is around 1.75%. The swaps market is pricing in about almost an 85% chance of another quarter-point cut in April, but the pace is expected to slow. The market has one cut fully discounted in H2 25. The terminal rate is seen near 1.75%. 

(As of March 28, indicative closing prices, previous in parentheses)  

Spot: $1.0825 ($1.0375) Median Bloomberg One-month forecast: $1.0755 ($1.0300) One-month forward: $1.0845($1.0395) One-month implied vol: 7.6% (7.6%)  

Japanese Yen:  The dollar bottomed against the yen on March 11 near JPY146.55, its lowest level, a five-month low, a day after the premium the US offers over 10-year JGBS was squeezed to its narrowest since August 2022. As US rates and the premium over Japan widened, the greenback recovered toward the March high (JPY151.30). We look for the dollar to pullback toward JPY148.50-JPY149.00 as we anticipate that the US real sector data will catch-up to the weakness seen in recent survey data. The Japanese economy is off to a poor start this year, with industrial production and the tertiary activities index (services) contracting in January. Household spending was soft, and the preliminary March composite PMI fell to its lowest since February 2022 (48.5). With core inflation at 3% in February, and well above the 2% target, the Bank of Japan remains in a tightening mode, but it is not in a hurry. While the swaps market has a little more than an 80% chance that the next hike is delivered in July, up slightly in recent weeks, the next rate hike is not fully discounted in the until October. 

Spot: JPY149.85 (JPY150.65) Median Bloomberg One-month forecast: JPY149.25 (JPY152.00) One-month forward: JPY149.35 (JPY150.10). One-month implied vol: 9.4% (10.8%) 

British Pound:  The dimmer economic prospects prompted the Chancellor of the Exchequer Reeves to cuts spending and rely on tackling tax avoidance to maintain the fiscal buffer of almost GBP10 bln that was identified last fall. The Office for Budget Responsibility cut this year’s growth forecast in half to 1%. It sees almost a 50% chance that the targets are missed, forcing more difficult decisions in the fall. The US tariffs and a most rise in borrowing costs could be the catalyst. The recently announced US auto tariffs could impact almost a fifth or around $12 bln of UK auto exports. The UK may be vulnerable to the reciprocal tariff threat. While US and UK tariffs on each other’s goods are nearly the same, the UK has a 20% VAT, which the US administration argues gives it an unfair trade advantage. The UK may also be vulnerable if the US seeks to offset the UK digital tax through tariffs. The Bank of England meets next on May 7 and the swaps market is discounting around a 75% chance of a cut, down from 90% probability seen at the end of February. The market has about 50 bp of cuts in the remainder of the year, while at the end of February, there was almost a 40% chance of another cut before year-end. For the last three weeks, sterling has mostly consolidated in a little more than a cent-and-a-half range above $1.2850. The $1.30 level was breached a few times, but it did not get above $1.3015. The breakout of the range will likely indicate the direction of the next 1-2-move. 

Spot: $1.2940 ($1.2575) Median Bloomberg One-month forecast: $1.2900 ($1.2400) One-month forward:$1.2945 ($1.2580) One-month implied vol: 6.7% (7.5%)  

Canadian Dollar:   Canada has been targeted by the Trump administration. It is not limited to tariff threats, but some reports suggest the US is contemplating forcing Canada out of the intelligence-sharing group, Five-Eyes, and makes overtures about incorporating Canada into the US. This has thrown a spanner into the Conservative’s electoral hopes. Carney, the former Bank of Canada, and Bank of England governor won the Liberal Party leadership contest, and within two weeks, called for a snap election (April 28). Under Carney, the Liberals are adopting more pro-business platform and jettisoning some of Trudeau’s unpopular policies. The polls give the Liberals a small advantage, within the margin of error. The Bank of Canada delivered a quarter-point rate cut in March, and although the monetary cycle is not over, a cut at the April 16 meeting looks unlikely. The US dollar fell for the second consecutive month against the Canadian dollar after rising for five months through January. It was the first back-to-back monthly decline since the end of 2023. The April 2 US tariff announcement is likely more important factor for the exchange rate than the high-frequency economic data. Given the relative size, the trade war will hurt the Canadian economy in the first instance harder than the US economy. This seems to make the Canadian dollar vulnerable. Still, and even after the auto tariff announcement, the US dollar is in the lower end of March’s range below CAD1.4300. 

Spot: CAD1.4315 (CAD 1.4460) Median Bloomberg One-month forecast: CAD1.4340 (CAD1.4400) One-month forward: CAD1.4300 (CAD1.4440) One-month implied vol: 6.5% (8.5%) 

Australian Dollar:The Reserve Bank of Australia began its easing cycle in February but has signaled a cautious approach. It is most likely to stand pat at the April 1 meeting, but the disappointing February employment report that showed a nearly 36k full-time job loss, which practically offset in full the January gain did boost odds of cut at the following meeting on May 20. Cyclone Alfred that hit in early March will adversely impact short-term growth metrics, the labor market, and may keep prices firm. Meanwhile, a national election has been called for May 3. All seats in the House of Representatives and a little more than half of the Senate are at stake. The latest polls suggest that the incumbent Labor Party has improved and is now ahead of the Liberal-National coalition. Prime Minister Albanese hopes to be the first prime minister in a couple of decades to enjoy re-election. Just before the election announcement, he announced tax cuts, an extension of the energy rebate, and an in increase in the threshold at which the tax for the government health-care system is triggered. The budget deficit projected to widen to about 1.5% of GDP from 1.0% in the current fiscal year, which runs through the end of June. The Australian dollar rose by about 1% in March, but it looks vulnerable in the near-term, but the risk-reward is not favorable as it is hovering around the middle of its $0.6200-$0.6400 trading range. It was turned back from its attempt at the year’s high seen in February near $0.6410. A break of the $0.6185-$0.6200 area warns of the risk of a return toward the year’s low a little below $0.6100. 

Spot: $0.6285 ($0.6210) Median Bloomberg One-month forecast: $0.6290 ($0.6300) One-month forward: $0.6290 ($0.6215)  One-month implied vol: 8.5% (9.9%)  

Mexican Peso:With inflation back within target and the economy weak, Mexico’s central bank delivered two half-point rate cuts in Q1 25. Mindful of these economic conditions, the central bank offered dovish foreign guidance indicating that if the economy evolves as expect, it will deliver another 50 bp cut at its next meeting (May 15). From the dollar’s spike peak in early February, when 25% tariffs on Mexico’s exports to the US looked imminent to the mid-March low, the US dollar fell by nearly 6.8%. The March low, slightly below MXN19.85, was the greenback’s low since shortly after the US election last November. We suspect that marks an important low and see potential in the coming weeks returning to the March high near MXN21.00. President Sheinbaum is winning strong praise for her interactions with the US administration. Her domestic support is over 80%. While Canada is seeking closer ties with Europe, Mexico has fewer options to offset the challenges posed by its northern neighbor. In the month through March 28, the Canadian dollar rose by about 1.25% against the dollar, almost half as much as the peso but to paraphrase Galileo, it did move. And year-to-date, the peso is up 2% while the Canadian dollar has not appreciated by 0.75%. Bolsa rose by nearly 7.5% in Q1 25 compared with less 1% gain in the Toronto Stock Exchange Composite. 

Spot: MXN20.3750 (MXN20.55) Median Bloomberg One-month forecast: MXN20.5350 (MXN20.75) One-month forward: MXN20.46 (MXN20.75) One-month implied vol: 13.0% (13.3%) 

Chinese Yuan:  The Chinese economy continues to lag Beijing’s hopes, and this has produced a stream of reform and stimulus measures. None of which has proved to end the deflation or ensure that the growth and inflation targets are met. Yet, the recent technological developments, like DeepSeek and BYD’s rapid charging system for electric vehicles and combining AI with robotics has captured investors’ imaginations. The index of Chinese companies that trade in Hong Kong is up 18% so far this year, putting it among the top performers. Officials closely manage the exchange rate, and through various means, keep it broadly stable against the US dollar. The dollar was confined to about a 1.6% range in Q1 25 after a 4% range in Q4 24. Officials tolerate a bit more movement in the offshore yuan but have intervened via liquidity in Hong Kong at times to temper it. In Q1 25, the dollar traded about a 2.15% range against the offshore yuan after about a 5.25% range in Q4 24. 

Spot: CNY7.2625 (CNY7.2785) Median Bloomberg One-month forecast: CNY7.2890 (CNY7.3500) One-month forward: CNY7.1800 (CNY7.1855) One-month implied vol: 4.9% (4.8%)


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