This morning, I decided to wake up earlier so I could take the dog for a walk and relieve his constipation. Being immersed in the financial world, the plethora of information is overwhelming, making me feel a little constipated in my mind. I took my father’s words to heart, in his native tongue, “La matinata, fa la giornata”, in translation, the early morn makes the day.  

Early this morning, the European Central Bank (ECB) made the sheep’s day as they cut their interest rates by another 0.25%. This brought their bank rate to 2%. Again, they cite that inflation is near their 2% target as they try to justify the move, also blaming the uncertainty of tariffs and their effect on the European economy. The power is in the hands of a few to control the lives of the masses. 

Meanwhile, the threat of an escalation in war with Russia is being touted. The Europeans would be no match as they have let their military capabilities erode. By heavily relying on NATO to protect their interests, the warmongers within are trying desperately to draw NATO and, thus, Americans into the fight. Forget about humanity when profit is the real motivation. 

In Canada, the Bank of Canada (BOC) left interest rates unchanged. Even though the Canadian economy is slowing down, the BOC blamed uncertainty over tariffs as the reason to hold the line. 

Further, there is a double-edged sword as inflation spiked in April, up 2.3% excluding taxes. Inflation is still eroding people’s purchasing power as employment uncertainty echoes louder. 

The recent jump in Canada’s Gross Domestic Product (GDP) is a mirage, rising to 2.2% from the expected 1.7%. It only happened as exports and orders increased to avoid the imposition of tariffs. The question remains, will GDP continue to grow or retract moving forward? 

Click here to get a real understanding of the direction Canada is taking, really eye-opening:

https://youtu.be/P0JL_ug0sn8?si=VoRps-0NPSwCqgly

South of the border, ADP (private sector) employment grew by 37k, expected 115k. A huge miss, but wages grew by 4.5%.  Further Industrial Supply Management Purchasing Manager Index (ISM PMI) fell sharply to 49.9 in May vs 52 expected. The cause is being blamed on uncertainty, as business decisions are being convoluted because of confusion over tariffs. 

As Trump screams for lower rates and cites the fact that European rates have been reduced drastically, the FED stands pat. They are using the excuse of uncertainty and a wait-and-see approach. It’s hard to get the ball rolling when the judicial system and the Fed throw bars into the spokes of a wheel. All it does is delay getting to the final destination. 

Meanwhile, the USD Index continues its downward trajectory within the 98.0 range, seeing currencies rise despite the European rate cut as the USD weakens overall. Weekly Jobless Claims are also contributing to the decline in USD strength as the 247k vs the previous week’s 235k, saw more people looking for work. 

Precious Metals maintain their strength as the USD weakens on the recent economic news bites. Gold is approaching USD$3400/oz and Silver is above USD$34/oz levels. On the other hand, Oil remains in the USD$62/B range, and the CAD jumps above the 0.73 cents level. Bitcoin remains firm in the USD$106k/coin vicinity.