Bank of Canada to Hike Again But Could Be Nearing End of Cycle

The Bank of Canada is almost certain to raise interest rates again on Wednesday when it announces its latest monetary policy decision at 14:00 GMT. After July’s jumbo-sized rate increase when the Bank lifted borrowing costs by a full percentage point, investors are anticipating another big, though slightly smaller, rate hike of 75 basis points. […]

First Impressions: Australian Q2 GDP

Output expanded by 0.9% in the June quarter, meeting market expectations. Consumer spending was a bright spot, up 2.2% (albeit falling short of our expectations). Exports also performed well. However, elsewhere conditions were mixed. The Australian economy expanded by 0.9% in the June quarter. That met market expectations, market median 0.9% and Westpac 1.1%. Annual […]

US Yields Marching Higher

Market movers today German industrial production for July will give further clues whether recession is approaching in Q3. Factory orders have fallen in recent months, but a notable order backlog may cushion the decline in production. We expect the Polish central bank to raise rates by 25bp in line with consensus, but with the risk […]

King Dollar Feeds Off Aggressive Fed

King dollar’s scorched-earth ascent to a fresh 20-year peak has clobbered broad swathes of global financial markets, with dollar-denominated assets clearly bearing the brunt. Spot gold has returned into sub-$1700 domain, Brent futures have tumbled to their lowest since February, while bitcoin is on the cusp of erasing almost all of its summer gains. The […]

Will Hawkish Federal Reserve Policies Endure?

All eyes seem to be on the US Dollar as traders await the Federal Reserve Chair’s speech this Thursday. Mr. Powell, who will be speaking at the Cato Institute’s Annual Monetary Conference, is expected to give actionable clues as to the Fed’s decision regarding interest rates. The Dollar which is currently trading above the 20-year […]

The Crypto Market Has Not Withstood the Pressure

Market picture Bitcoin lost more than 5% to $18.8K in 24 hours, ending an extended lull. Ethereum loses more than 8.5%, falling to $1520. The crypto market’s capitalisation is down 5.8% to $940B, according to CoinMarketCap, which is in line with the amplitude of the crypto flagship’s decline. As is often the case, BTC was […]

Forex Implications of the New UK Prime Minister

In general terms, the economic policy of the UK under the new government is expected to remain very similar. For example, the new Chancellor Kwasi Kwarteng might have had differences in public image with former chancellor Sunak, but in practice, agrees on most major issues. In fact, the argument between them was mostly along the […]

Canadian Dollar Steady ahead of BoC Meeting

The Canadian dollar has edged higher today. In the European session, USD/CAD is trading at 1.3173, up 0.17%. BoC expected to remain aggressive The Bank of Canada meets later today and policy makers are expected to keep their foot on the pedal and deliver a sizeable hike of 0.75%. This follows the surprise super-size increase […]

Aussie Stabilizes on Solid GDP

AUD/USD has posted slight losses today, trading at 0.6726. This follows a disastrous Tuesday, when the Aussie fell 0.92%. Earlier, AUD/USD fell as low as 0.6999, its lowest level since July 14th. Australian GDP within expectations Australia’s GDP for Q2, released earlier today, has helped stabilize a wobbly Australian dollar. GDP posted a 0.9% gain, […]

Sunset Market Commentary

Markets Core bonds recovered some of the lost ground today. Notable outperformer: UK Gilts. Yields in the UK drop 5 bps at the long end to a whopping 23 bps at the front end of the curve. The sharp decline follows comments from several BoE policy makers, including chief economist Pill, in their appearance before […]