BoC Opts for Another Oversized Hike and Firm Tightening Bias

BoC goes big again with a 75 bp hike in September 3.25% overnight rate puts monetary policy in ‘restrictive’ territory Statement flags further tightening to come, but pace likely to slow The BoC continued on its steepest rate-hiking path in decades, following up July’s 100 bp increase with a slightly smaller (but still oversized) 75 […]

Yen Breaks Down, But FX Intervention Won't Change Much

The Japanese yen has resumed its terrifying downtrend, crushed under the boot of a central bank that refuses to follow other economies in raising interest rates. With inflation dynamics still subdued, traders are betting the Bank of Japan won’t lift a finger to stop the yen’s bleeding when it meets in two weeks and that […]

ECB to Deliver a 75bp Rate Hike – Nationalbanken to Exit Negative Policy Rates

Market movers today The highlight today will be the ECB meeting, where we look for a 75bp hike in all three policy rates (see also ECB Research: We expect 75bp at the meeting next week, 29 August). Hawkish comments from ECB members have recently highlighted that persistently high inflation takes precedence over the deteriorating growth […]

50 or 75bp?

Yesterday, the Bank of Canada (BoC) raised its policy rate by 75bp at yesterday’s meeting, as expected. Today, the European Central Bank (ECB) will decide by how much they will be raising their policy rates. There are two camps: The 75bp-hike camp believes that the ECB should hike the rates relatively faster to tame the […]

The Bar Lagarde Needs to Meet is Set at 75 bps

Markets The biggest move in core bonds happened on UK soil. Gilt yields crashed 20bps at the front end of the curve. Some BoE officials, testifying before Parliament, pointed out that the new government’s energy plans would curb inflation. Markets figured it could potentially lower the need for rate hikes. Other elements playing in favour […]

US Payrolls (Together with CPI Release on Sept 13) are the Last Important Input for Fed

Markets The established market trends basically continued yesterday. Yields maintained (EMU) or even extended (US) recent repositioning as central bankers reinforced their message that they have no choice but to continue their anti-inflationary crusade. The rise in EMU yields temporary slowed, as there was little in the way of specific news. Especially short-term European yields […]

All Eyes on the Jobs Report

Stock markets in Europe opened positively on Friday after what has been an otherwise rotten week, while Asia was fairly mixed ahead of the US jobs report. It will be interesting to see whether Europe can maintain the rebound today considering we’re heading into the weekend not certain that gas will start flowing through Nord […]

Bitcoin Chained to $20K, and That's Good

Market picture Bitcoin remains firmly anchored to the psychologically significant $20K round level, changing by only fractions of a per cent for almost a week. Ethereum continues to draw green candles, but this is more than nominal growth, also within fractions of a per cent, while the price is still hovering around $1580. Of the […]

How Far Can USD/JPY Go?

The yen has weakened to the lowest level since 1998, with the USDJPY popping above the 140 handle. Through the week, the pair rose 1,9%. In a period of economic uncertainty, usually traders would expect the yen to get stronger on safe-haven flows. Is the yen no longer a safe haven? There’s more to the […]

Aussie Stabilizes after Slide, NFP Looms

After three straight losing sessions, the Australian dollar is in positive territory today. In the European session, AUD/USD is trading at 0.6802, up 0.21%. It has been a rough stretch for the Australian dollar, which fell 2.89% in August. On Thursday, AUD/USD fell as low as 0.6771, its lowest level since July 15th. The Australian […]