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The latest projection is here:

• CTV projects Carney’s Liberals will form a minority government. This is less positive for the CAD if accurate.

Sure enough …. CAD taking a hit:

The USD is more broadly higher also, against EUR, AUD, Kiwi$, GBP

This article was written by Eamonn Sheridan at www.forexlive.com.

Around 2.2% of China’s GDP is directly impacted by U.S. tariffs, according to a note from Nomura economists.

They estimate that the U.S. accounted for 14.7% of China’s total goods exports in 2024, a figure that rises to 15.2% when including re-exports through Hong Kong, and to 20.6% when factoring in rerouted trade flows. After accounting for exemptions — with about 16.3% of exports not subject to reciprocal tariffs — the economists calculate that tariffs are directly hitting 2.2% of China’s GDP.

They also warn that the true economic impact could be larger, as the shock spills over into other areas, particularly the services sectors that support merchandise exports.

Earlier:

• Goldman Sachs says Trump tariffs could endanger 16 million export jobs in China

This article was written by Eamonn Sheridan at www.forexlive.com.

CTV projects Carney’s Liberals will form a minority government.

CAD had risen but was retracing even prior to this latest projection:

This article was written by Eamonn Sheridan at www.forexlive.com.

I posted comments earlier from Chinese Foreign Minister Wang Yi:

• China’s FM says concession and retreat will only make the bully more aggressive

More now on Yi urging BRICS nations to resist U.S. tariff pressure, warns against appeasement. Speaking at a BRICS meeting, Chinese Foreign Minister Wang Yi urged emerging-market countries to stand firm against U.S. tariff threats, warning that giving in would only embolden Washington. His comments underscored China’s firm stance against entering trade negotiations under pressure, even as U.S. Treasury Secretary Scott Bessent floated the possibility of banning certain exports to China to gain leverage.

Wang sharply criticized U.S. trade tactics, stating, “The U.S., which has long benefited enormously from free trade, is now going so far as to use tariffs as a bargaining chip to demand exorbitant prices from all countries.” He warned that appeasement would backfire, adding, “If one chooses to remain silent, compromise and cower, it will only make the bully want to push his luck more.”

This article was written by Eamonn Sheridan at www.forexlive.com.

Projections show Carney’s Liberals have won. Whether he’ll govern in majority or minority is still up for grabs. Still too early for that assessment to be made.

• CTV says Carney has won the election – too early to say if majority or minority though

CAD rising against the USD:

This article was written by Eamonn Sheridan at www.forexlive.com.

CTV says Carney has won the election – too early to say if majority or minority though.

CBC saying the same now also.

Carney confirmed as Prime Minister. This is the fourth consecutive win for the Liberals in Canada. The Conservatives were well ahead until Trump began his attacks on Canada (back in January, Polymarket had odds of the Liberals winning at an ‘its over’ of just 3% … what a come back!). He has a talent as a wrecking ball.

This article was written by Eamonn Sheridan at www.forexlive.com.

Results on the east coast of Canada were weaker for the governing Liberal party and Mark Carney but the numbers began rolling in for vote-rich Ontario and Quebec in the last 30 minutes and there has been a shift in fortunes. The Liberals are doing particularly well in Quebec.

Expect some volatility in these numbers over the next hour as it becomes more clear.

That said, CAD is doing almost nothing on these numbers, which highlights how low the market thinks the stakes are.

This article was written by Adam Button at www.forexlive.com.

I posted earlier on Nikkei: “Japan life insurers set to cut JGB holdings by $9bn”

Via a Barclays note now, in brief:

• Japan’s largest four life insurers plan to reduce or stay flat in JGBs
• Many life insurers view super-long bonds as attractive compared to their liability costs, but they are unlikely to buy aggressively.
• Most have already completed their asset-liability duration matching to comply with new regulations and remain cautious about the risk of rising yields.
• The pace of purchases is expected to be steady, with the largest insurers concentrating on the 30-year sector, while others are targeting both the 20- and 30-year maturities. One insurer with a longer liability profile is also considering investments in the 40-year sector.

This article was written by Eamonn Sheridan at www.forexlive.com.

Mark Carney’s Liberals are currently ahead of Conservative Party leader Pierre Poilievre.

Adam spoke with Reuters about how the Canadian dollar might move on the election.

Poilievre and Carney

This article was written by Eamonn Sheridan at www.forexlive.com.

Via a Barclays note:

• US credit spreads are likely to widen in the coming six months
• Due to prevailing highly uncertain environment

The background to this is that the spreads have come in over the past two weeks, from extremes after Trump’s April 2 tarif announcements. Since then, Barclays says prospects of trade agreements between the U.S. and China, low corporate bonds supply, and better-than-expected corporate earnings have brought them back in.

But, risks remain:

• related to tariffs
• “We remain cautious and still expect spreads to be wider in the next six months”

This article was written by Eamonn Sheridan at www.forexlive.com.

The early count is favouring Carney, but its way too early.

Betting markets are showing improving odds for Poilievre.

Long evening ahead is the best bet!

If you are eyeing USD/CAD for clues … not much to go on right now:

This article was written by Eamonn Sheridan at www.forexlive.com.

Goldman Sachs note from Sudnay ICYMI

• US tariffs on Chinese imports could put as many as 16 million jobs at
  risk in China
• “If high US-China
  tariffs were to persist and Chinese exports were to fall
  precipitously, labour markets would surely feel the pressure”
• the 16
  million jobs would be involved in the production of exports to the US
  and nearly one-quarter would be in the wholesale and retail
• Goldman Sachs says communication equipment, apparel and chemical products “more
  vulnerable” than other manufactured goods thanks to their “high
  share in US-bound exports from China”

Yesterday we had stimulus efforts being worked on in China:”

• ForexLive Asia-Pacific FX news wrap: China outlines more economic support

This article was written by Eamonn Sheridan at www.forexlive.com.