Soft US Data Tempers Fed Hawks, But Big Tech Earnings Fall Short

Google and Microsoft reversed the joyful Tuesday sentiment. The US dollar and the US yields fall on soft economic data – that tempered the hawkish Federal Reserve (Fed) expectations. The Bank of Canada (BoC) is about to deliver another jumbo rate hike, while Meta will be the next Big Tech to report earnings today. Happy, […]

What Can the ECB Do Now?

Tomorrow the ECB meets for its latest policy assessment. The consensus among economists is that there will be a hike of 75bps, and the market appears to be pricing it in. Therefore, the reaction in the currency pairs might be minimal, since over two-thirds of the surveyed economists agreed. Those who didn’t were split between […]

Aussie Extends Rally as Inflation Outperforms

AUD/USD is sharply higher for a second straight day. In the European session, the Australian dollar is trading at 0.6484, up 1.412. After losing over 1% on Monday, the Aussie has roared back with gains of over 2.7%. Australia’s inflation jumps to 7.3% Australia’s inflation report is the driver behind today’s gains, as third-quarter inflation […]

USD/CAD Hits 3-Week High ahead of BoC

The Canadian dollar has extended its gains today, as the US dollar has retreated against all the major currencies. In the European session, USD/CAD is trading at 1.3547, down 0.44%. Earlier, USD/CAD dropped as low as 1.3512, its lowest level in three weeks. Bank of Canada likely to remain hawkish All eyes are on the […]

Pound Surges Higher, UK Budget Delayed

The pound has extended its gains and has gained 2.3% this week. In the European session, GBP/USD is trading at 1.1581, up 0.75% on the day. Sunak delays budget Incoming UK Prime Minister Rashi Sunak faces profound challenges on the economic front. Sunak will be looking to settle things down after a dizzying pace of […]

Bank of Canada Delivers a 50 Basis-Point Hike    

The Bank of Canada raised the overnight rate by 50 basis points to 3.75%, while stating that it will continue with Quantitative Tightening (QT). On rising prices, it stated that “measures of core inflation are not yet showing meaningful evidence that underlying price pressures are easing. Near-term inflation expectations remain high, increasing the risk that […]

BoC's Half Point Hike Suggests Peak is Near

BoC dials back tightening pace with below-consensus 50 bp hike to 3.75% Statements says rates expected to rise further but getting closer to end of tightening phase BoC sees economy stalling in coming quarters The BoC dialed back the pace of its tightening cycle today with a 50 bp increase that fell short of market […]

BoC's Smaller-than-Expected Rate Hike Not Crushing CAD

There was an important signal today that monetary authorities in North America are ready to ease the pace of policy tightening faster than the market expects. The Bank of Canada raised the rate by 50 points to 3.75%, although analysts, on average, predicted a repeat of September’s move with a 75-point hike. While the Bank […]

EUR/USD Punches above Parity, ECB Next

EUR/USD continues to power forward and has breached the parity line for the first time since September 20th. The euro is red hot, having gained 2.1% this week, as the US dollar has hit a bump in the road and is lower against all the major currencies. In the North American session, EUR/USD is trading […]

RBA Board to Raise the Cash Rate by 50bps on November 1

The September quarter inflation report has come as such a major surprise that we think the Reserve Bank Board will decide to raise the cash rate by 50bps at the next Board meeting on November 1. The quarterly CPI print was an increase of 1.8% for the trimmed mean (the accepted measure for underlying inflation) […]