January 22nd Financial News
FastBull Featured
3 hours agoRussia's seaborne crude oil exports plummet as U.S. sanctions take effect; comprehensive tariffs may hit Canada's economy by 3%; Trump policies spark market volatility, driving a strong rebound in the dollar and futures markets...
[Quick Facts]
1. Russia's seaborne crude oil exports drop significantly as U.S. Sanctions take effect.
2. U.S. Senate Finance Committee approves Scott Bessent as Treasury Secretary nominee.
3. Comprehensive tariffs could hit Canada's economy by 3%.
4. Tariff concerns overshadow inflation worries, giving the Bank of Canada a reason to cut rates next week.
5. Canada's inflation slows to 1.8% due to Trudeau's temporary sales tax relief.
6. Trump policies spark market volatility, driving dollar and futures higher.
[News Details]
Russia's seaborne crude oil exports drop significantly as U.S. Sanctions take effectEarly indications suggest that U.S. sanctions targeting Russian oil trade are taking effect. Last week, Russia's seaborne crude oil exports fell to their largest weekly decline since November. According to compiled vessel-tracking data, exports have dropped, with the less volatile four-week average falling below 3 million barrels per day for the fourth consecutive week, nearing a 16-month low.
During the week ending January 19, 26 tankers loaded 19.26 million barrels of Russian crude oil, down from 27 tankers carrying 21.06 million barrels the previous week. Daily crude oil flows decreased by about 260,000 barrels to 2.75 million barrels per day, marking a 9% decline.
U.S. Senate Finance Committee approves Scott Bessent as Treasury Secretary nominee
On January 21, the U.S. Senate Finance Committee approved Scott Bessent's nomination for Treasury Secretary with a 16-11 vote, forwarding the nomination for a final Senate vote. If confirmed, Bessent will become a key spokesperson for economic policy in the Trump administration, significantly influencing fiscal policy, financial regulation, international sanctions, and overseas investments.
Comprehensive tariffs could hit Canada's economy by 3%
A report by the Canadian Imperial Bank of Commerce (CIBC) warns that even with exemptions for oil and gas, comprehensive U.S. tariffs could cost the Canadian economy up to 3.25%. The report evaluates four potential scenarios for U.S. tariffs on Canadian imports, ranging from 10% to 20%, with potential exemptions for key industries.
President Trump stated on Monday evening that he is considering imposing 25% tariffs on Canadian and Mexican imports starting February 1. Canadian Prime Minister Justin Trudeau vowed to respond, stating "everything is on the table." The report notes that excluding a 20% tariff on commodities—which account for nearly half of Canadian exports to the U.S.—would still lead to a 3.25% GDP decline. Even under a more conservative scenario of 10% tariffs, excluding commodities and the auto sector, the economic impact would still reach approximately 1.35%.
The report indicates that the Trump administration may be reluctant to impose tariffs on industries heavily reliant on close integration with their Canadian counterparts, as doing so "would result in significant job losses in the U.S., contradict Trump's affordable energy plan, and substantially increase inflation."
Tariff concerns overshadow inflation worries, giving the Bank of Canada a reason to cut rates next week
Doug Porter, Chief Economist at BMO Capital Markets, noted that President Trump's threat to impose 25% tariffs on all Canadian imports starting February 1 outweighs any concerns policymakers might have about accelerating core inflation. Porter cited the temporary sales tax holiday introduced last month, which "clearly slowed overall inflation." Although the Bank of Canada's preferred three-month annualized core inflation measure exceeded 3%, the upper range of the Bank's target, Porter emphasized that the heavy shadow of trade uncertainty "overshadows almost everything else." He anticipates the Bank of Canada will cut rates next week as a risk management measure.
Canada's inflation slows to 1.8% due to Trudeau's temporary sales tax relief
Canada's inflation rate decelerated for the second consecutive month, with the Consumer Price Index (CPI) rising 1.8% year-over-year in December, down from 1.9% previously. The slowdown is attributed to Prime Minister Trudeau's temporary federal sales tax exemption on certain goods from December 14 to February 15, leading to lower prices for restaurant food and alcoholic beverages.
Excluding the tax-exempt items, which account for about 10% of the CPI basket, the overall CPI growth would accelerate to 2.3%, remaining within the Bank of Canada's 1%-3% target range.
Trump policies spark market volatility, driving dollar and futures higher
On Tuesday, the U.S. dollar rebounded by 0.64% to 108.69, recovering partially from Monday's record 1.2% drop. Following Trump's return to office and his proposal to impose 25% tariffs on Mexican and Canadian imports, the Mexican peso fell by 1.3%, and the Canadian dollar hit a five-year low.
The euro declined by 0.62%, and the British pound dropped by 0.67%. U.S. futures markets rallied, with Nasdaq futures rising 0.56% and S&P 500 futures up 0.49%. European markets posted modest gains, with the STOXX 600 up 0.16%, though Germany's DAX fell 0.1%. U.S. Treasury yields fell by four basis points to 4.57%. Trump emphasized that tariffs and energy exports would reduce the U.S.-EU trade deficit.
[Today's Focus]
UTC+8 17:15 ECB Governing Council Member Villeroy Speaks
UTC+8 18:30 ECB Governing Council Member Knot Speaks
UTC+8 23:05 ECB President Lagarde Speaks
