CAD: A strong hedge against energy risks – BBH

Source Fxstreet

Brown Brothers Harriman’s (BBH) Elias Haddad expects Canada’s March labor force survey to show a modest job rebound, while the Bank of Canada (BoC) can use its benign inflation backdrop to look through the Oil shock. He notes that rate hike pricing has been trimmed and continues to favor long Canadian Dollar (CAD) crosses as a hedge against a more persistent energy price shock.

Jobs data and Oil dynamics support CAD

"March labor force survey is due on Friday. The economy is expected to add +14.9k jobs after losing -83.9k in February. Encouragingly, Canada’s favorable inflation backdrop gives the Bank of Canada (BoC) a small cushion to look through the oil-price shock and refrain from raising rates in the face of a worsening labor market."

"The swaps curve has trimmed BoC rate hike bets over the next twelve months from as much as 75bps on March 26 to around 50bps currently."

"We still favor long CAD on the crosses as a good hedge against a more persistent energy price shock. Canada gets the terms of trade boost and has fiscal space to absorb some of the growth drag to domestic demand."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Natural Gas sinks to pivotal level as China’s demand slumpsNatural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
Author  FXStreet
Jul 01, 2024
Natural Gas price (XNG/USD) edges lower and sinks to $2.56 on Monday, extending its losing streak for the fifth day in a row. The move comes on the back of China cutting its Liquified Natural Gas (LNG) imports after prices rose above $3.0 in June. It
placeholder
Pinduoduo Earnings Incoming: Morgan Stanley Sees Long-Term Profit Potential​Insights – On November 21, Chinese e-commerce giant Pinduoduo (PDD) will release its Q3 2024 earnings.
Author  Mitrade
Nov 20, 2024
​Insights – On November 21, Chinese e-commerce giant Pinduoduo (PDD) will release its Q3 2024 earnings.
placeholder
Elon Musk’s xAI and Neuralink Launch New Funding Rounds​Billionaire Elon Musk recently raised funds for his two high-profile tech companies, xAI and Neuralink.
Author  Insights
Jun 03, 2025
​Billionaire Elon Musk recently raised funds for his two high-profile tech companies, xAI and Neuralink.
placeholder
WTI eases below $103.50 as US, Iran reportedly seeking 45-day ceasefireWest Texas Intermediate (WTI), the US crude oil benchmark, is trading around $103.30 during the early European trading hours on Monday. The WTI price retreats after reports that the United States (US) and Iran are making a push for a 45-day ceasefire. 
Author  FXStreet
Yesterday 09: 07
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $103.30 during the early European trading hours on Monday. The WTI price retreats after reports that the United States (US) and Iran are making a push for a 45-day ceasefire. 
placeholder
Crypto Weekly Radar: All eyes on Donald Trump’s ultimatum, US macroeconomic dataCrypto markets begin the week with mixed sentiment, with Bitcoin (BTC) trading above $69,000 following last week’s rebound. Still, markets remain cautious as traders weigh risks stemming from Donald Trump’s renewed threats toward Iran ahead of the ultimatum set for Tuesday.
Author  FXStreet
23 hours ago
Crypto markets begin the week with mixed sentiment, with Bitcoin (BTC) trading above $69,000 following last week’s rebound. Still, markets remain cautious as traders weigh risks stemming from Donald Trump’s renewed threats toward Iran ahead of the ultimatum set for Tuesday.
Related Instrument
goTop
quote