Summary

• The lack of progress in reopening the Strait of Hormuz has not prevented oil prices from stabilizing or risk appetites improving today.
• Although economic theory puts emphasis on interest rate differentials, we find that the dollar is frequently sensitive to the direction of US interest rates.
• Despite US Treasury Secretary Bessent and Japanese officials showing a solid front, the lack of US comments around recent intervention is in stark contrast with the type of verbal intervention in January.
• In a firm US dollar environment, the Canadian dollar was among the best among the G10 currencies yesterday, second to the Norwegian krone.

The lack of progress in reopening the Strait of Hormuz has not prevented oil prices from stabilizing or risk appetites improving today. Equities and bonds are trading with a firmer bias. The Trump-Xi meeting tomorrow is

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