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SocGen's Overnight Economic News Summary

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Societe Generale in its early Monday economic news summary pointed out:

Brent +4%, 10-year United States Treasury +4bps at 4.39%, US dollar (USD) bid. President Trump: Iran's response to the U.S. proposal to end the conflict is "totally unacceptable." Upside surprise for nonfarm payrolls (NFP) shrugged off on Friday. USD/CNY trades below 6.80 before this week's Trump/Xi summit.

United Kingdom Prime Minister Starmer to deliver speech in parliament on Monday on European Union reset; over 30 Labour members of parliament (MP) reportedly support leadership challenge, written support of 81 MPs required to trigger succession race.

China's consumer price index accelerates to 1.2% year over year in April from 1.0% in March, core up to 1.2% from 1.1%. The producer price index climbs to 2.8% from 0.5%.

Norway's CPI cools to 3.4%% year over year in April from 3.6% in March. Underlying rate ticks up to 3.2% from 3.0%.

CFCT positioning: Euro (EUR) net longs reduced to 3.9% of OI, yen (JPY) shorts cut to 17.4%, sterling (GBP) shorts steady at 23.1%, Australian dollar (AUD) longs raised to 28.1%, Canadian dollar (CAD or loonie) shorts lowered to 6.0%, Mexico's peso (MXN) longs trimmed to 33.2%, Nymex longs dialled back to 8.7%.

Week ahead: President Trump/Xi summit (Wednesday to Friday), U.S. CPI, retail sales, Treasury refunding. Germany ZEW survey, eurozone Q1 gross domestic product second read, U.K. Q1 GDP. Bank of Canada and Bank of Japan minutes. Romania's central bank forecast to stay on hold at 6.50%. CPI for Brazil, India, and Romania.

Nikkei -0.5%, EUR 10-year IRS +1.5bps at 3.045%, Brent crude +4% at US$105.2/barrel, Gold -0.9% at US$4672/oz.

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TD Expects Canada Labour Force Increases To "Lose Steam" In Coming Months, Capping Further Rises In Jobless Rate

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CIBC Says "Weak" Labor Market in April Strengthens View Central Bank to Stay on Hold With Rates for Rest of Year

The Canadian labor market continued its "weak start" to 2026 in April, with a third decline in employment within the first four months of the year, seeing the unemployment rate rise further, said CIBC after Friday's Labour Force Survey (LFS).The 18,000 decline in jobs came against consensus expectations for a 10,000 increase and, combined with a slight uptick in participation, resulted in a rise in the unemployment rate to 6.9%, noted the bank.The unemployment rate increased most for young people aged 15-24, but also continued to drift higher for core-aged (25-54) workers. By sector, information, culture & recreation saw the largest decline in employment on the month, and by class of worker, the reduction was driven wholly by full-time, or 47,000 lower, and by public sector paid employment, down 10,000.Wage growth for permanent employees decelerated to 4.8% year over year, from 5.1% in the prior month, but remained higher than its 2025 average, pointed out CIBC.Statistics Canada noted that higher wage inflation so far this year has largely been due to compositional factors, such as a smaller proportion of workers with shorter job tenures.For the Bank of Canada, evidence that slack within the labor market is, if anything, increasing rather than reducing, should limit the ability for the oil price shock to spread into wider inflationary pressure, stated CIBC.The bank continues to see the BoC holding interest rates at their current level throughout 2026.

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