1. Jobs Data Takes Center Stage This Week
The biggest economic data this week will be the employment reports out of the U.S. and Canada.
Expectations are for a gain of 17,000 jobs in Canada and 85,000 jobs in the U.S.
Keep in mind that Canadian employment data tends to be very volatile.
In the U.S., the number of jobs being created has dropped significantly. This is happening as bond yields have moved higher and inflation concerns have become louder. Remember, the Federal Reserve has a dual mandate: price stability and employment.
2. Copper Is Starting to Make Noise
Copper is making noise.
This is primarily happening because of potential tariffs on refined copper; market participants are essentially trying to corner the market.
But let’s see how this unfolds.
The U.S. uses around 2 million tonnes of copper each year.
Now, with the U.S. hoarding copper, China, which uses roughly 15–16 million tonnes annually, could run into supply issues.
Overall, copper has also been facing production headwinds. Remember the sulphuric acid problems. And on the bigger picture, only a handful of major mines produce a significant portion of global supply.
Looking at the chart, a close above $6.65 could lead to something crazy.
3. The Rally Has Been Impressive
The rally over the past few days has been impressive, to say the least but not surprising.
We’ve said before that if the S&P 500 moved above its 50-day moving average, it could rally sharply. That’s exactly what happened.
We were also watching 7,550 as a key upside level that could lead to new highs. That happened too.
Now the big question is: How much higher can it go? Year to date, the S&P 500 is up roughly 13.7%, and it’s up about 23.6% over the past year.
4. Don’t Overlook Japan
There’s one headline that got buried beneath all the noise, and it shouldn’t be overlooked: the Japanese yen.
It isn’t just the Bank of Japan intervening to support the currency. Apparently, the U.S. is helping too.
How? By selling U.S. dollars.
Now the question becomes: how long can this continue? Japan is the largest holder of U.S. Treasuries. Do they eventually start selling those Treasuries?
If the U.S. is helping prop up the yen, does that mean it wants a weaker U.S. dollar?
We think the dollar is already reacting. The U.S. Dollar Index (DXY) has fallen almost 2% since the interventions began.
And what does all of this mean for the carry trade?
5. Bitcoin, Gold & Canadian Dollar
Bitcoin looks like it’s itching to move higher. For now, it’s building a solid base around its 50-day moving average.
The data center backlash continues.
Gold and silver are catching a bid in a very constructive way. We’re expecting a strong bounce here. The Canadian dollar is looking constructive too. And finally, the big banks are starting to catch up. TD now says Canada has experienced a rolling slowdown.