Articles

Six weeks ago it was a foregone conclusion that the Conservatives would win the 2025 election (it’s due in October or earlier) and Pierre Poilievre would become the next Prime Minister.

Then three big things happened:

1. Trudeau resigned
2. Mark Carney ran for leadership
3. Trump threatened Canadian sovereignty

Trudeau was way past his best-before date and widely disliked in Canada but this poll shows that presumptive Liberal leadership winner Mark Carney could get a fresh look. That shows that Canadians dislike Trudeau personally more than Liberal policies (though I’d argue they really dislike the immigration policy post-covid).

The other problem is that Poilevre wasn’t hard enough on Trump and took a soft line. That wasn’t what Canadians wanted to hear when they were blind-sided by Trump’s talk of annexation.

It’s all led to some real chaos and a Conservative Party that’s searching for a message. Poilevre polls very well with men and has been trying to soften his image with women but, unfortunately for him, Carney is almost a perfect foil as he scores well with women voters.

I still think that Conservatives win a majority as Trump’s attacks cool and Conservatives re-focus on domestic problems but it’s much more uncertain than I thought. If polls continue in this direction and Liberals win, I expect a negative reaction in the loonie. That said, Carney is still a decided shift to the right from Trudeau and isn’t someone that markets would be fearful of.

As for the timing of an election: Carney is riding high and he promised to call an election immediately if he wins the leadership race on March 9.

This article was written by Adam Button at www.forexlive.com.

One thing that’s been floating around in my head in a comment that President Trump said two weeks ago when he signed the fresh ‘maximum pressure’ executive order to halt Iran oil exports.

“This is one that I’m torn about,” Trump told reporters in the Oval
Office. “Everybody wants me sign it. I’ll do that. It’s very tough on
Iran,” he said.

That struck me as strange, you can watch it here.

This order is similar to the one he signed in his first term that curb Iran’s oil exports and he was much more enthusiastic the first time.

This time Trump called it ‘historic’.

“Hopefully we’re not going to have to do that much,” he said.

He talked about making a deal but it had a clear objective.

“They can not have a nuclear weapon, with me it’s very simple. They just can’t have a nuclear weapon,” he said. “I think they’re close, they’re too close.”

Iran is probably more determined than ever to get one.

Trump is someone who has consistently been against war but he’s also very close with Netanyahu and Iran was considerably weakened in Palestine and Libya. Trump and Netanyahu could see this as an opportune time to strike and that’s something that would seriously upend the Middle East and spike oil prices. It could also explain Trump’s eagerness to make a deal in Ukraine because it would ease Russian oil flows.

WTI crude oil is up $1.06 to $71.77.

Meanwhile, the world of natural gas is much simpler. Today it’s simply that forecasts show a cold winter staying cold in the US and that led to a rise back above the $4 level.

This article was written by Adam Button at www.forexlive.com.

There were several reports over the long weekend suggesting that Intel could be split up and sold off. That has fresh traction with a report from Bloomberg that Silver Lake is near a deal for a stake in Intel’s Altera.

Intel bought Altera in an all-cash deal in 2015 worth $16.7 billion. Currently, Intel’s market cap is $115 billion but that comes after a 40% rally in the past week on breakup speculation.

Silver Lake is a Silicon Valley private equity firm that has made landmark deals on Dell, Skype, Alibaba, Broadcom and NXP Semiconductors so it knows the space. None of this is a big surprise as reports in January said Silver Lake was in the running.

In any case, INTC is up 13% today and edged further higher after the latest report.

This article was written by Adam Button at www.forexlive.com.

US equities are under some mild selling pressure at the moment as the S&P 500 erased a small gain and is now down 10 points to 6104. A test of the 6100 barrier held and this looks like moderate back-and-fill price action.

Zooming out, the daily chart shows consolidation just below the January record high.

In terms of the fundamentals, the market is generally waiting for whatever comes next from Trump and Congress. I fear there will be some real angst about passing the tax cut before it gets to the finish line.

On the fundamental side, the soft retail sales reading on Friday is a concern and likely to set off two weeks of soul searching around the strength of the economy.

This article was written by Adam Button at www.forexlive.com.

BofA maintains a EUR/USD outlook of short-term weakness but a medium-term recovery. They do not expect parity, but the pair could drift lower before rallying to 1.10 by year-end—well above consensus. With EUR/USD already at their mid-year forecast of 1.05 ahead of schedule, their broader view remains intact: USD strength persists in Q1, but fades in H2 2025.

Key Points:

Near-Term EUR/USD Weakness

• The USD remains broadly supported through Q1.
• EUR/USD may face further pressure but should stop short of parity.

Gradual EUR/USD Recovery Later in 2025

• USD depreciation expected in H2 as global growth stabilizes.
• EUR/USD is forecast to rally towards 1.10 by year-end.
• This projection is above consensus expectations.

Forecast Timeline

• Mid-year target of 1.05 reached early—but view remains unchanged.
• Expecting further near-term EUR/USD weakness before a recovery later in 2025.

Conclusion:

BofA sees limited downside for EUR/USD in the near term before a stronger rebound in H2 2025. Parity is unlikely, and they expect a year-end rally to 1.10, suggesting EUR shorts may be exhausted later this year.

For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here.

This article was written by Adam Button at www.forexlive.com.

CNBC is reporting that Russia Pres. Putin is not interested in a peace deal:

• U.S.-Russia Talks: The Trump administration has started preliminary negotiations with Russia to end the Ukraine war, with discussions set to take place in Saudi Arabia.
• Putin’s Intentions: Western intelligence officials and U.S. congressional sources indicate there is no intelligence suggesting Putin wants a real peace deal; instead, he still aims to control all of Ukraine.
• Putin’s Strategy: Intelligence suggests Putin believes he is winning and can wait out Ukraine and Europe. Battlefield losses are not pressuring him to stop fighting.
• Trump’s View: After a call with Putin, Trump stated he believes Putin wants to end the war, contradicting intelligence reports. He also spoke with Ukrainian President Zelenskyy, who expressed a desire for peace.
• Negotiating Team: Trump has assembled a team for negotiations, including Secretary of State Marco Rubio, CIA Director John Ratcliffe, National Security Adviser Michael Waltz, and Middle East envoy Steve Witkoff.
• Fogel’s Release: The U.S. secured the release of American teacher Marc Fogel from Russia, with Witkoff traveling to Moscow to bring him back. During the trip, Witkoff met with Putin for three hours, though details of the meeting remain undisclosed.
• Next Steps: Rubio, Witkoff, and Waltz are set to meet the Russian delegation as part of the ongoing diplomatic efforts.

This article was written by Greg Michalowski at www.forexlive.com.

Trump has announced that reciprocal tariffs will be going into effect in April, and my guess is that it will lead to countries looking to gain favor or reduce trade deficits.

Toyota is supporting a US LG battery plant with a $1.5 billion order according to Bloomberg.

Trump has said that countries with trade tariffs, who apply VAT to US products or subsidize domestic industries will be charged a reciprocol tarriff on their goods.

Countries can avoid tariffs by reducing tariffs or producing good within the US border. Buying LG batteries within the US borders (instead of sourcing them from outside the US), may be a third way to gain favor.

This article was written by Greg Michalowski at www.forexlive.com.

European shares are closing higher on the day. The exception perhaps is the UK FTSE 100 which is down -0.1%. The German DAX is closing at a new record high.

The final numbers are showing:

• German DAX +59.04 points or 0.26% at 22863.24
• France’s CAC +17.43 points or 0.21% at 8206.57
• UK’s FTSE 100 -1.28 points or -0.01% at 8766.74
• Spain’s Ibex +127 points or 0.98% at 13143.91
• Italy’s FTSE MIB +226.43 points or 0.59% at 58554.14

This article was written by Greg Michalowski at www.forexlive.com.

China’s finance minister Wang speaking on geopolitical issues at the UN Security Council says:

• Gaza, West Bank are homeland of Palestinian people, not a bargaining chip in political trade-offs
• Palestinians governing Palestinian is an important principle that must be followed in post-conflict governance of Gaza.
• China supports all efforts conducive to peace talks with war in Ukraine.

Meanwhile Iran is on wire saying

• US foolish plans for Gaza will not go anywhere

This article was written by Greg Michalowski at www.forexlive.com.

The major US stock indices are trading back into negative territory after giving up earlier gains. The S&P index traded above its record high closing level at 6118.71 reaching a high of 6125.39, but has since rotated and currently trades down -1 point or -0.02% at 6113.50.

The NASDAQ index is trading down -14 points or -0.07% at 20,112.23. It high price extended to 20110.11.

The Dow up 30 is trading down -148 points or -0.34% at 44396. Traders eyes 44602.02.

Shares of Meta (traded as high as $737, but as rotated sharply lower and currently trades at $718.75 down -$18. The shares of matter have risen for 20 consecutive days.

Intel shares are up 8.86% at $25.69. There were tops over the weekend that Broadcom and Taiwan Semiconductor were interested in different parts of the Intel business at the request of the Trump administration. TSMC shares are down -0.90%. Broadcom shares are down -2.99%

This article was written by Greg Michalowski at www.forexlive.com.

• Prior month 47
• NAHB housing market index 42 versus 47 estimate
• Current single-family home sales 46 versus 50 in January (revised from 51)
• Index of prospective buyers 29 versus revised 32 in January (was previously 33)
• Sales expectations in the next six months plunged -13 points to 46

The latest HMI survey also revealed that

• 26% of builders cut home prices in February, down from 30% in January and the lowest share since May 2024.
• The average price reduction was 5% in February, the same rate as the previous month.
• The use of sales incentives was 59% in February, down from 61% in January.

Regionally indices were lower led by a sharp fall in the Northeast. The West index is at its lowest level going back to at least January 2024. The prior below was 37 in May, July, and August 2024:

• Northeast 48 versus 65 last month
• Midwest 43 versus 44 last month
• South 42 versus 47 last month
• West 35 versus 42 last month

Weakness in housing is starting to gather a little more momentum. Treasury Secretary Bessent said last week that the Trump administration is focused on bringing down the 10 year treasury yield. That yield is instrumental in the setting of the mortgage rates.

This article was written by Greg Michalowski at www.forexlive.com.

Not surprising, Ukraine’s president Zelenskiy is saying:

• Negotiations with Russia should not happen behind our backs.

He also said:

• He had constructive talks with Turkish Pres Erdogan
• Turkey and Europe should be involved in discussions regarding ending the war.
• Cancels trip to Saudi Arabia following US, Russia talks. UPDATE: The meeting is now scheduled for March 10
• There is no decision to end the war without Ukraine

The Ukraine president was due to visit Saudi Arabia on Wednesday. A meeting at Diriyah Palace in Riyadh underscored Crown Prince Mohammed bin Salman’s efforts to position Saudi Arabia as a key diplomatic player.

Saudi state media framed the talks as initiated by the prince, who has maintained close ties with Russia throughout its war on Ukraine.

Saudi Arabia also played a role in prisoner negotiations and hosted Ukrainian President Zelenskyy for an Arab League summit in 2023. Zelenskyy is expected to visit the kingdom later this week.

:

This article was written by Greg Michalowski at www.forexlive.com.