COMMODITIES: Crude Rises, Precious Metals Fall As Tariff Threats Increase

• The limited growth-related releases of note saw real GDP growth surprise higher than expected in October at 0.3% M/M (cons/advance 0.2) after an upward revised 0.2% (initial 0.1) in September, but with a disappointing -0.1% M/M advance estimate for November (full due two days after the meeting on Friday).
• Since then, nominal retail sales saw a particularly strong 1.6% M/M jump in the December advance, likely in response to the temporary GST/HST holiday that started in mid-Dec but was announced Nov 21 with some discretionary spending likely held back.
• It leaves conservative monthly GDP estimates on track for circa 2% annualized growth in Q4 (chart below shows a crude entry of 0.0% M/M for Dec), with a chance of a fair bit higher, with the BoC forecasting 2.0% for Q4 back in October.
• With the BoC previously forecasting potential growth at 2.4% in 2024 and 1.9% over 2025-26, it’s possible that excess supply stopped building and could have been trimmed a touch.
• The Bank will however be attempting to calculate and look through the extent to which recent strength has come from the temporary boost from the tax holiday.
• On the outlook more generally, firms in the Business Outlook Survey for Q4 reported improvements in sales expectations after a period of weak demand: “This expectation is largely driven by recent interest rate reductions and the anticipation of further cuts ahead” with the latter on note in current deliberations. 

• Date $MM Issuer (Priced *, Launch #)
• 01/28 $3B #JPMorgan PerpNC5 6.5%
• 01/28 $3B #American Express $1.45B 6NC5 +75, $300M 6NC5 SOFR+102, $$1.25B 11NC10 +90
• 01/28 $2.5B #Toronto-Dominion Bank $1.25B 3Y +62, $500M 3Y SOFR+82, $750M 7Y +87
• 01/28 $2B Carnival Corp 8NC3
• 01/28 $2B #Arab Republic of Egypt $1.25B 5Y 8.625%a, $750M 8Y 9.45%
• 01/28 $1.75B #Capital One 11NC10 +162
• 01/28 $750M *Ziraat Bank 5Y 7.375%
• 01/28 $500M *Aircastle 5Y +108
• 01/28 $Benchmark ForteBank 5Y 8%a

• RES 4: 159.45 High Jul 12  
• RES 3: 159.26 0.618 proj of the Sep 16 - Nov 15 - Dec 3 price swing
• RES 2: 158.08/87 High Jan 15 / 10 and the bull trigger 
• RES 1: 156.75 High Jan 23       
• PRICE: 155.61 @ 16:23 GMT Jan 28
• SUP 1: 153.72/34 Low Jan 27 / Low Dec 18  
• SUP 2: 152.55 61.8% retracement of the Dec 3 - Jan 10 bull leg
• SUP 3: 151.81 Low Dec 12   
• SUP 4: 151.06 76.4% retracement of the Dec 3 - Jan 10 bull leg   

The primary trend condition in USDJPY remains bullish, however, Monday’s move down highlights a stronger short-term bear cycle. The pair has breached two important support points; 155.12, the 50-day EMA, and 155.13, a trendline drawn from the Sep 16 ‘24 high. This opens 152.55, a Fibonacci retracement point. Initial firm resistance has been defined at 156.75, the Jan 23 high. Clearance of this level would be a bullish development.