BoC Hits (Hopeful) Pause on Rate Hikes

The BoC remains highly data-dependent and won't hesitate to push interest rates higher if necessary to return inflation to the 2% target rate. And there are two additional labour market reports and two additional inflation reports before the next scheduled decision in October. But we continue to expect that the recent soft-patch in economic data will continue, and look for the overnight rate to hold where it is through the end of this year

With Clouds Gathering Over the UK Economy, What's Next for Pound?

Although the Bank of England is expected to keep raising rates for a while longer, the pound has lost decent ground lately against its US counterpart as traders seem to have been paying growing attention to growth dynamics. With underlying inflation more than three times the BoE’s 2% objective, will BoE policymakers stay keen to continue pressing the hike button or will they turn to a more cautious stance in order to safeguard the local economy?

ECB Preview: A Final Rate Hike, But Restrictive Policies Are Not Over

We expect the ECB to deliver a final 25bp rate hike during next week's ECB meeting due to still too strong inflation momentum and projected inflation above the target. We also expect an advancement of the end to full reinvestment process of PEPP currently guided for Dec 24 to be on the cards. Specifically, we expect ECB to 'task committees' for an announcement at the October meeting.

GBP/USD – Sinks to Three-Month Low after BoE Monetary Policy Report Hearing

Dovish BoE commentary weighs on the pound Two more rate hikes are still heavily priced in Major support below around the 200/233-day SMA band

Uncomfortably Strong US Outlook

The US ISM services index flirted with 55; employment, new orders, and ISM prices also showed significant progress last month. The strong ISM data bolstered the speculation that the Federal Reserve (Fed) could opt for another rate hike before the year end and keep the rates at restrictive levels for longer.

Dollar in General Trades a Tad Stronger

The dollar in general trades a tad stronger. EUR/USD turns south to 1.072. The yen’s safe haven status prevents it from losing further territory. Core bonds trade with a small weakening bias. Today’s economic calendar has dried up.

Japanese Yen Takes Aim at 148

The Japanese yen is slightly higher on Thursday. In the European session, USD/JPY is trading at 147.39, down 0.19%. The yen can’t seem to find its footing and has dropped close to 1% this week. Earlier today, the yen fell as low as 147.87, closing in on the 148 line which has held since October 2022.

USD/CAD Analysis: How the Bank of Canada Decision Affected the National Currency

Yesterday it became known that the Bank of Canada (BOC) decided to keep the rate at 5% — the highest level in 22 years.

No Significant Changes to Our Australia Growth Forecasts

We have lifted our growth forecast for 2023 from 1% to 1.2% and for 2024 from 1.4% to 1.6%.We see no marked change to the key themes behind our forecasts.

Interesting data from Sweden today

Today, we get the final German inflation figures. This will hold more information on what lies behind the still quite sticky core inflation in August. In Sweden, we get lots of interesting data with GDP, production value indicator, and consumption indicator.