Canada's Labour Market Gains in September

The Bank of Canada has been looking for evidence that past rate hikes are starting to bite. Today's employment report muddies the outlook. Financial markets are cementing pricing for another 25bps rate hike in the coming months, causing the Canada 2-year yield to surge over 15bps this morning.

Key Signals of Crypto Market Revival

The crypto market has been torn, rising over 2% in the last 24 hours to $1.076 trillion. The excitement came after the approval of the Ethereum Futures ETF from Valkyrie, which will be available for trading from Friday. It’s not the victory everyone expected, as they were waiting for a long list of spot Bitcoin ETFs to be approved. But the positive news coincided nicely with a rebound in equity markets and a corrective decline in the dollar, adding fuel to the fire.

Canada's Economy Flat in July, With Modest Growth Projected in August

The Canadian economy held steady on a month-on-month (m/m) basis in July, in line with Statistics Canada's advanced estimate and a tick below market expectations of slight 0.1% m/m growth. The flash estimate for August points toward modest 0.1% m/m growth.

A Major Boost for ECB But There's Still a Long Way to Go

European stock markets are performing well at the end of the week after spending much of it in the red on the back of fresh interest rate concerns.

Sunset Market Commentary

Today’s action adds to our believe that we’ve witnessed a short term exhaustion move on markets yesterday, making way for some short term consolidation as eco data drip in. US Treasuries already staged a comeback during yesterday’s US session with European bonds catching up at the start of dealings this morning. We must add that they failed to really build on those opening gains, confirming strong underlying bearish sentiment, especially at the (very) long end of the curve these days.

Week Ahead – US Government Shutdown, RBA and RBNZ Rate Decisions, Weekend Data

This will be a busy week in the US with a looming government shutdown, an expanding UAW strike, a lot of Fed speak, and an NFP report that could show hiring fell to the lowest levels since early 2021.  The September jobs report is expected to show hiring slowed from a 187,000 pace to 170,000.  Despite the loosening of the labor market, the unemployment rate is expected to tick lower to 3.7%, and wage pressures are expected to increase on a monthly basis from 0.2% to a 0.3% pace.

Weekly Focus

This week, we have seen a significant increase in bond yields in both the US and Europe. Markets are reducing expectations for rate cuts from central banks, which are now priced to happen only slowly. This follows signals from the central banks themselves that they are still ready to combat inflation which remains too high.

Week Ahead – Dollar Shines ahead of Nonfarm Payrolls

The US dollar rally has gone into overdrive lately. Empowered by a stunning rise in US yields, solid economic fundamentals, and safe haven flows, the dollar has charged higher to record 11 consecutive weeks of gains against the euro. 

Will RBNZ Opt for a Hawkish Hold?

Back in August, the Reserve Bank of New Zealand (RBNZ) decided to maintain the Official Cash Rate (OCR) at 5.5%, adding that the current level of interest rates is constraining spending and thereby inflation pressures, also expressing confidence that with rates staying at restrictive levels for some time, inflation will return to the 1-3% target range.

Weekly Economic & Financial Commentary: "Soft Landing" Narrative Challenged

Following last week's FOMC meeting, where the emphasis remained on incoming data guiding the Fed's interest rate path going forward—especially in regard to the duration in which rates may remain elevated—the data calendar heated up this week with plenty of indicators providing insight as to whether the Fed's forecast of a "soft landing" is plausible.