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The Weekly Bottom Line: BoC Govenor Strikes Cautious Tone

U.S. Highlights Federal Reserve Chairman Powell reassured markets that there will be no early tightening of monetary policy or drawdown of asset purchases even with a brighter economic outlook. Consumers remain at the forefront of the recovery, as personal income surges and spending rebounds on the back of income...

CHF Selloff Intensifies, NZD Rises after RBNZ

New Zealand Dollar rises broadly today after RBNZ stood pat and didn't sound particularly concerned with the strong exchange rate. Though, Sterling remains the strongest one, continued to be supported by lockdown exit optimism. Other commodity currencies are also firm despite steady risk market sentiments. Yen and Swiss Franc...

BoC Macklem: Solid rebound expected in the immediate months ahead

In a speech, BoC Governor Tiff Macklem said Canadians "have already climbed a long way back from the very deep economic hole we were in last spring". Much of Canada emerging from the latest round of pandemic containment measures, "we expect a solid rebound in the immediate months ahead". But...

Canadian Jobs Data May Not Dampen Spirits

The loonie may not be brought to tears when Canada releases its first employment report of the year on Friday at 12:30 GMT, as weaker figures are inevitable given the tight lockdown restrictions during the month of January. The data, however, will still be worthy to watch since the...

Sterling Softens ahead of BoE, Dollar Maintains Gains

Sterling softens notably today as focus turns to BoE rate decision, and more importantly the stance regarding negative interest rates. Euro and Swiss Franc remain generally weak too. New Zealand and Canadian Dollars are paring some gains as risk markets turned mixed again. But Aussie is somewhat bucking the...

BoC Schembri: We might be willing to tolerate a small overshoot in inflation

BoC Deputy Governor Lawrence Schembri said that Fed's adoption of a more dovish policy framework last week could in the end benefit the Canadian Economy. The central bank is also considering to allow an inflation overshoot like the Fed does. "Our models show that despite an appreciation of the (Canadian)...

Weekly Economic & Financial Commentary: Mixed Fortunes for the Global Economy

U.S. Review Housing Remains at the Forefront of the Recovery Housing starts jumped 5.8% during December. Single-family starts soared 12%, while multifamily starts dropped 13.6%. Total starts are running at a 1.67 million-unit pace, the strongest pace since 2006. Existing home sales rose 0.7% to a 6.76 million-unit pace in...

The Weekly Bottom Line: Biden’s Stimulus Would Boost Growth

U.S. Highlights President Biden's inauguration was the marque event this week. Previous market optimism on the stimulus potential of the new administration seemed to run out of steam at week's end. The current administration has ambitious plans for further Covid-19 relief, but it remains uncertain what Congress will agree...

CAD Extended Rally as BOC Sounded Less Dovish

BOC’s January meeting came in less dovish than expected. While leaving the monetary policy measures unchanged, the central bank has upgraded the economic outlook for 2022. Meanwhile, policymakers hinted QE tapering if confidence over recovery improves. At the meeting, BOC kept the overnight rate at 0.25% and the QE...

BoC kept rate at ELB of 0.25%, expects strong Q2 rebound

BoC left overnight rate at "effective lower bound" of 0.25% widely expected. Bank rate and deposit rate are held at 0.50% and 0.25% respectively. It will continue with the QE program with CAD 4B per week. BoC expects no rate hike until into 2023, while QE will continue until...

(BOC) Bank of Canada will hold current level of policy rate until inflation objective is achieved, continues quantitative easing

The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank is maintaining its extraordinary forward guidance, reinforced and supplemented by its quantitative easing...

USD Continues To Slide Amidst Market Optimism

The USD continued its slide against a basket of other currencies yesterday, as the market mood was more risk on and US Treasury Secretary Yellen’s confirmation hearing before the Senate yesterday tended to reaffirm that. Yellen urged lawmakers to act big on coronavirus stimulus as was expected, and played...

Stocks Climb, Dollar Slips As Yellen Makes Case For More Stimulus

Stocks power higher after Yellen calls for more big spending to fight pandemic Risk assets rally ahead of Biden inauguration as reflation trade boosted Dollar under renewed selling pressure, gold capitalized Yellen talks up big spending Risk appetite was riding high on Wednesday after Treasury Secretary nominee Janet Yellen reignited...

Canadian Dollar Rises Ahead Of The BOC Decision

The euro bounced back today after relatively strong economic data from Europe. In Germany, survey data by ZEW showed that the current conditions improved from -66.5 to -66.4 in January. The economic sentiment increased from 55.0 to 61.8. In the Eurozone, the economic sentiment rose from 54.4 to 58.3,...

Canadian Dollar in Spotlight, With Eyes on BoC and Oil Price

Canadian Dollar is a main focus today with BoC rate decision featured. Recent strong risk-on markets haven't given the Loonie much lift. It's upside is somewhat capped as oil price turned into consolidation after last week's spike. Also, traders turned cautious before BoC's indication on the chance of a...

EUR/CAD in recovery ahead of BoC, downside breakout still expected

BoC rate decision is a major focus today. It's widely expected to keep overnight rate unchanged at 0.25%. The size of the asset purchase program will also be held at CAD 4B per week. Focuses will be on Governor Tiff Macklem's guidance on the chance of a "micro rate...

Currency Pair Of The Week: USD/CAD

Joe Biden will be sworn in as President of the United States in Wednesday, however this is more likely to be a ceremonious event than a market moving event for traders. There are other events this week that are more likely to influence the US Dollar, one of which...

Bank of Canada: Opening the Door for a Rate Cut

The BoC will conclude its policy meeting at 15:00 GMT Wednesday and there are some whispers in market circles about a ‘micro rate cut’. Covid infections have risen, the economy is losing momentum because of the lockdowns, and the vaccine rollout is progressing slowly, so a solid case can...

BOC Preview – All Eyes on Likelihood of Micro Rate Cut

BOC is widely expected to leave its overnight rate at the effective lower bound of 0.25% in January. The size of asset purchases will also stay unchanged at CAD4B/week. Over the past month, there has been market speculations about the possibility of a micro rate cut since November. While...

The Weekly Bottom Line: New Year, New Stimulus

U.S. Highlights President-elect Biden unveiled a proposal for a new relief package this week. The $1.9 trillion plan includes additional one-time stimulus checks, unemployment benefit supplements and funding for state and local governments. Additional fiscal support will help bolster a faltering economy. Initial jobless claims rose by 181k last...

Forward Guidance: BoC to Flag Medium-Term Optimism, Near‑Term Concern

The Bank of Canada’s first rate decision of 2021 is expected to yield no change to its policy stance with the overnight rate holding at 0.25% and the quantitative easing program intact. Along with the rate decision, the Bank of Canada will publish the Monetary Policy Report which will...

Week Ahead – ECB, BoJ and BoC Meet But All Eyes on US Capitol

The first of the new year’s central bank meetings will get under way next week and it will be a heavy schedule on the data front as well. The European Central Bank, Bank of Japan and Bank of Canada will almost certainly be debating the latest setback to the...

CAD to Gain Further On Risk Appetite and Higher Crude Oil Price, Upside Limited by BOC Actions

Similar to Australian dollar, Canadian dollar this year should continue to benefit from broad-based USD weakness, global recovery, and rebound in commodity, in particular crude oil, prices. However, with the US as its largest trading partner, BOC should track the Fed’s monetary policy closely, and avoid excessive appreciation of...

Forward Guidance: Virus Resurgence Will Temper Optimism Among Canadian Businesses

We look for the Bank of Canada’s quarterly Business Outlook Survey (BOS) to reiterate that the near-term economic background remains challenging albeit more for some businesses than others. The survey was likely collected from mid-November to mid-December as virus containment measures were being re-imposed across Canada, and those measures...

The Weekly Bottom Line: Holiday Shopping Blues

U.S. Highlights Prospects for fiscal stimulus drove volatility in equity markets this week. Policymakers are reportedly closing in on a much-needed relief package following several months of gridlock. Economic data released this week were less cheerful. Jobless claims rose to levels last seen in early September, while retail sales...

Dollar Selloff Returning ahead of FOMC, No Clear Direction Elsewhere

Dollar trade with a generally soft tone today, with strong risk-on markets in the background. But overall, most major pairs and crosses are bounded inside last week's range. The economic calendar is extremely busy for the rest for the week. But there are still a couple of things to...

BoC Macklem: Vaccines put more certain timeline on global demand resurgence

In a speech, BoC Governor Tiff Macklem said the economic recovery from the pandemic is "at a very difficult stage". For the nears term, rising coronavirus infections will "dampen growth and could even deepen our economic hole" and uncertainty is "elevated". The recovery is going to be "long and...

Weekly Economic and Financial Commentary: Winter Is Here

U.S. Review Winter Is Here Emergency authorization of the Pfizer-BioNTech COVID vaccine appears imminent, but the virus is running rampant across the United States today, pointing to a grim winter. Despite continued negotiations, additional COVID-relief remains elusive (see topic of the week on page 7) while initial claims for unemployment...

The Weekly Bottom Line: Economic Progress Shows Signs of Waning

U.S. Highlights The S&P 500 edged lower this week on the back up in weekly jobless claims and sentiment that negotiations over the additional relief package have come to a standstill. On the economic front, besides jobless claims, optimism among small businesses was dialed back, and the consumer price...

Australian Dollar Accelerates Up with Iron Ore Prices, Euro Capped after Post ECB Rally

Accelerating rally in iron ore prices pushes Australian broadly higher today, on the back of steadily firm risk sentiment. The Aussie is currently the strongest one for the week, followed by New Zealand Dollar, while Canadian is not far away, with help from oil prices. Sterling remains the worst...