Bank of Canada Likely to Make One Last Rate Hike—Then Take a Breather

The Canada’s central bank is expected to slow the pace of interest rate hikes at next week’s policy decision. And odds are that the 25 basis point increase we anticipate (down from the 50 basis point increase in December) could be the last of this hiking cycle. Though broader inflation trends are still running above […]

The Weekly Bottom Line: Bad News is Bad News

U.S. Highlights Markets finished the week lower on weaker economic data and rising political risks. December retail sales registered the biggest monthly decline in 2022, finishing the fourth quarter flat. Housing starts were down less than expected, driven by the volatile multifamily component. Existing home sales continued to soften. This week’s Fed speakers demonstrated a […]

Weekly Economic & Financial Commentary: The Pain Is Spreading

Summary United States: The Pain Is Spreading The housing sector has borne the brunt of the Fed’s efforts to slow the economy, and this week’s data showed the industry continues to reel. But pain is now clearly spreading beyond housing with grim reports on retail sales and manufacturing activity this week. Next week: Leading Economic […]

Forex and Cryptocurrencies Forecast

EUR/USD: The Calm Before the Storm The DXY Dollar Index (the ratio of the USD to a basket of six other major foreign currencies) has been moving in a fairly narrow sideways channel since January 12. A small surge in volatility was caused by the publication of data on retail sales in the US on […]

Positive Tone in the Markets

Market movers today A quiet start to the week, with consumer confidence for the euro area and Denmark the only releases of interest. Although consumer confidence rose for a second consecutive month in December, it remains extremely low from a historical perspective and is at odds with the relative resilience in consumer spending seen in […]

Aussie Off to a Bright Start in 2023

The Aussie dollar has started 2023 strongly, rising above 70 cents to highs since August. A softer US dollar and improved China sentiment have been key. This week’s highlights include Australia jobs data, the Bank of Japan decision and US retail sales. The Australian dollar has risen about 1.6 cents or 2.3% so far in […]

Investors Remain Risk On

Market movers today The week kicks off in a quiet fashion as the US banks are closed for Martin Luther King’s Day celebration. The World Economic Forum’s annual meeting starts in Davos today, and over the week, we will hear a bunch of interesting speeches. Overnight, we will get Q4 GDP figures from China alongside […]

Buying Euro on Every Ray of Sunlight

Earnings season kicked off last Friday when the big US banks reported their Q4 results. The results were mixed. JP Morgan warned of a “modest deterioration” in the macroeconomic outlook, Bank of America reported a better-than-expected trading revenue, but a worse-than-expected net interest income. Citi turned in a record-setting performance but equity trading fell short […]

BoJ Meeting Remains Talk of the Town

Markets The core bond yield slide finally halted on Friday, with some help of the technical charts. The US 10y yield (+6.1 bps) for example touched and then rebounded off 3.42% which marks both the December lows and the 50% retracement of the August-October yield rally. Other yields moved 7.5-8.9 bps higher in the 2y-5y […]

Turning Point? Softer US Inflation Prompts More to Dump the Dollar

USD/JPY falters over Japan’s rising inflation The Japanese yen extended gains as accelerating inflation may pressure the BoJ to act soon. One of the major themes of 2023 could be Japan finally normalising its monetary policy. Consumer prices have been rising steadily nationwide, with the latest CPI in Tokyo reaching 4%, above the central bank’s […]