Week Ahead – Trouble Spews for Yen as Fed, BoE and SNB to Hike, Put Spotlight on BoJ

A crucial week is coming up for the markets as no less than four central banks are scheduled to announce their latest monetary policy decisions. There is a strong possibility of a 75-basis-point rate hike from the Federal Reserve, Bank of England, as well as the Swiss National Bank. The Bank of Japan, though, is […]

Forward Guidance: Canadian Core Inflation Will Stay Higher for Longer

New Canadian inflation data will set the stage for more hikes from the Bank of Canada. Next week’s report lands just after a surprisingly firm U.S. inflation reading for August (which likely cemented at least another outsized 75 bps increase in the Federal Reserve’s fed funds target range in September.) Here in Canada, headline annual […]

Fed Preview: Fast Pace Hiking Cycle Continues

We expect Fed to hike 75bp next week – the market is more upbeat and see a possibility of a 100bp hike. Real yields are rising and financial conditions have tightened, which means Fed’s hawkish post-Jackson Hole communication works as intended. The market now discounts a terminal rate close to 4.5% next spring. We look […]

Weekly Economic & Financial Commentary: Yields Push Higher Ahead of Next Week's FOMC Meeting

Summary United States: Good Grief Financial markets reacted in a zig-zag pattern to this week’s economic data. Consumer prices surprised to the upside, led by core goods inflation showing little signs of slowing. At the same time, consumers have yet to meaningfully pull back on goods spending. This week’s data reaffirm our view that the […]

Week Ahead – Aggressive Tightening

US Many on Wall Street are watching the Fed’s rate hiking cycle and are getting nervous they will tip the economy into a recession.  With scorching inflation, the FOMC may consider a full-point rate hike but will likely settle on delivering its third consecutive 75 basis-point increase. At Wednesday’s policy meeting, Fed Chair Jerome Powell […]

The Weekly Bottom Line: Full Steam Ahead for the FOMC

U.S. Highlights CPI inflation surprised to the upside in August, rising 0.1% m/m. The core measure also recorded a sizeable 0.6% m/m gain, as both goods and service categories accelerated on the month. Financial markets have now fully priced a 75-basis point hike from the Fed next week and are anticipating the Fed funds rate […]

Forex and Cryptocurrencies Forecast

EUR/USD: Ahead of the US Federal Reserve FOMC Meeting The World Bank said last week that risks of a recession in 2023 are growing amid simultaneous tightening of monetary policy by the world’s leading Central banks and the energy crisis in Europe. According to Citigroup strategists, the dollar remains the only safe haven for investors […]

A Flurry of Central Bank Meetings Ahead

Market movers today There are no major releases today, so attention will turn to the string of central banks meetings coming up this week, starting with Riksbanken tomorrow, followed by the Fed (Wednesday) and Bank of Japan, Bank of England, Swiss National Bank and the Turkish central bank on Thursday. Also, in focus will be […]

Markets Will Look Forward to a Long Series of Central Bank Policy Decisions

Markets Last week, a strong flattening/inversion move illustrated investors’ believe in a further frontloading strategy as global central banks are trying to regain control on inflation. Despite mostly hawkish ECB speak of late and the Fed keeping silent ahead of this week’s policy decision, the US yield curve still took the lead. In a weekly […]

Canadian Inflation Data: The Case for BoC to Back Off?

The BOC has taken an even more aggressive rate hike route than the Fed, giving the CAD the fastest rising rate of the majors. This didn’t stop the meteoric rise in inflation that most developed countries have been seeing this year, although not as dramatic as in the US. Given the economic interconnectivity with the […]