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FOMC Policy Meeting: Policymakers May Keep Their Cards Close to Their Chest

The Fed’s policymaking arm will conclude its two-day policy review on Wednesday, with the announcement and the press conference expected to hit the headlines at 18:00 GMT and 18:30 GMT respectively. There are rumours that bond tapering talks may wrap up, but board members will probably keep the cards...

Dollar’s Near Term Bearishness Persists, Other Currencies Mixed

Dollar ended as the worst performing one last week as near term bearishness persisted. Q1's rebound should have completed and the main question is whether it's ready for new lows. That is, indeed, in favor unless overall risk-off sentiments were choked off by some unexpected events. The forex markets were...

Weekly Economic & Financial Commentary: Raising the Bar Even Further

U.S. Review: Raising the Bar Even Further This week's lighter economic calendar allowed forecasters more time to assess the implications from the prior week's blowout retail sales report. We have revised our forecast for Q1 growth up to a 5.5% pace from 4.8% previously, and growth for the year...

The Weekly Bottom Line: Big Events Next Week Drive Markets

U.S. Highlights Without much noteworthy economic data this week, market sentiment soured on a leaked Biden administration proposal to raise the maximum tax rate on capital gains of high-income taxpayers. First quarter GDP data and a rate announcement from the Federal Reserve are also on the docket next week....

Week Ahead: Central Banks, Coronavirus, Joe Biden and Big Tech Earnings

Heading into the end of April, central banks and earnings will give direction to the markets.  The ECB held its ground last week while the BOC chose to taper bond purchases from C$4 billion per week to C$3 billion per week. Are the FOMC and the BOJ in the...

Week Ahead – Fed to be a Yawn but Glowing US Data Could Spoil the Calm

Never have central bankers so seemingly sung from the same hymn sheet as Fed policymakers have in the past few weeks. Having successfully aligned market expectations, the Federal Reserve is almost certain to repeat the message that QE tapering is not on the near-term horizon when it meets next...

Forward Guidance: Canadian GDP Continued to Recover ahead of Third Virus Wave

Broader economic trends in Canada continued to improve in February and March, as containment measures eased (at least temporarily) following the winter wave of virus spread. Statistics Canada already reported a preliminary estimate that GDP rose 0.5% in February, and we look for a similar, if not larger gain...

Cliff Notes: Policy Design and Implementation Critical to Recovery

Key insights from the week that was. This week’s key release for Australia was the minutes of the March RBA Board meeting. Clearly the RBA remains committed to QE for as long as purchases “will assist with progress towards the goals of full employment and inflation”. The Board is also...

CAD Rallies After BoC’s Hawkish Tilt

The Loonie tended to rally against the USD yesterday, as despite BoC remaining on hold as expected, the bank decided to adopt a hawkish tilted tone, expressing considerable confidence and tapered its bond purchasing program. On the other hand, the FX market was rather quiet, with the USD retreating...

Will The ECB Disturb The Waters?

ECB unlikely to rock euro – resilient economy vs higher yields Loonie flies after BoC tapers QE program, signals earlier rate hikes Wall Street bounces back, earnings season ramps up Lagarde's tone to drive the euro The spotlight will fall on the European Central Bank meeting today. Not much has...

ECB Eyed As India’s Unwanted Covid-19 Record Hurts Crude Oil

India epicentre of Covid - bad news for crude and INR ECB's Lagarde likely to remain dovish Fed to follow footsteps of BOC? The US markets rallied sharply yesterday to erase losses suffered on Tuesday, lifting foreign currencies and metals as the dollar sold off amid the risk-on trade....

Noise Cancelling Headsets

The tail chasing noise is already deafening this week. Having spent the first part of the week in doom and gloom mode as the market ran short of bullish excuses to buy everything, equity markets staged a sharp rebound overnight. The cyclical Russell 2000 seeing most of the action,...

USD/CAD Forms Bearish Flag Pattern After Hawkish BoC Decision

The Canadian dollar spiked against the US dollar after the Bank of Canada (BOC) decision. As expected, the bank left interest rates unchanged at 0.25%. It also decided to slash its weekly quantitative easing purchases from C$4 billion to C$3 billion. This was in line with what some analysts...

Euro Mixed Ahead of ECB, Dollar Sellers Await Stock Rally

Canadian Dollar surges broadly overnight after BoC's hawkish tapering. Yet, it's currently still one of the weakest for the week together with Dollar. The post-meeting buying was not enough to turn the Loonie into black against others yet. As for today, markets are rather quiet so far. US stocks...

BOC Tapers QE Program and Delivers Upbeat Economic Outlook

As we have expected, the BOC delivered a hawkish tapering of QE purchases in April. the weekly asset purchases will reduce to CAD3B/week, from CAD4B/week previously. Meanwhile, it also upgraded the economic assessments for both the country and the world. Policymakers now expect the spare capacity to be fully...

Asian Open: Hawkish BOC Propels CAD, Wall Street Reverses Course

The Canadian dollar was the strongest major overnight with a more hawkish-than-expected meeting. Asian Futures: Australia's ASX 200 futures are up 37 points (0.53%), the cash market is currently estimated to open at 7,034.50 Japan's Nikkei 225 futures are up 330 points (1.16%), the cash market is currently estimated to...

The Great Monetary Turn Begins

The pandemic led to the most-aggressive deployment of monetary policy in history but its success means it's already time for withdrawal, something that will begin with the Bank of Canada on Wednesday. The loonie lagged Tuesday ahead of the decision while the yen led the way as risk aversion...

The Bank of Canada Tapers QE Program, Sees Economic Slack Being Absorbed in the Second Half of 2022 

The Bank of Canada (BoC) held its key policy interest rate at 0.25% but recalibrated its quantitative easing (QE) program by reducing the pace of asset purchases from at least $4 billion per week to $3 billion per week. On when it will raise the overnight rate, the...

BoC Slows Bond Buying as Economic Outlook Improves

Growth forecasts upgraded substantially Rate hike guidance brought forward to H2/22 QE tapered from $4B to $3B per week The Bank of Canada made some substantial upward revisions to its growths forecast alongside today’s policy announcement. Canadian GDP is now seen increasing 6.5% in 2021—a touch stronger than our...

BoC press conference live stream

https://www.youtube.com/watch?v=zn2d9Sj8coY

CAD surges after BoC, a look at EUR/CAD, CAD/JPY

Canadian Dollar jumps broadly after BoC statement. The tapering was well expected. But BoC now expects economic slack to be absorbed in H2 2022, suggesting that the timing of rate hike could happen much earlier than prior expected. CAD/JPY appears to have drawn strong support from 55 day EMA and...

BoC tapers, expects economic slack to be absorbed in H2 of 2022

BoC left overnight rate target unchanged at 0.25% as widely expected. Bank rate and deposit rate are held at 0.50% and 0.25% respectively. Weekly net purchases of Canadian Government bonds is reduced from CAD 4B to CAD 3B, as widely expected too. It noted that "this adjustment to the...

Canada’s Headline Inflation Rate Surged in March, as Expected

Headline CPI jumped 2.2% year-over-year in March, on the back of slumping energy prices a year ago Ex-food and energy products still soft at 0.9% but BoC preferred core measures edged higher Firming underlying price pressure to come with higher demand As expected, headline CPI growth printed an eye-catching...

Canada: Rising Gasoline Prices Push Inflation to 2.2% in March

The Canadian Consumer Price Index (CPI) jumped to 2.2% year-on-year (y/y) in March, up sharply from 1.1% in February, but below the median forecast for 2.3%. Gasoline prices were the main story. Compared to the lows year ago, the price at the pumps was up a whopping 35.3%....

Dollar and Yen Fail to Extend Rebound in Mixed Markets

The financial markets are trading in mixed mode today. European stock indices are mixed while US futures point to slightly lower open. Sentiments are slightly on the risk-off side on coronavirus concerns, but selloff is so far relatively shallow. There is also no clear momentum for Yen and Dollar...

BoC Expected to Taper but Stay Dovish

The Canadian dollar is almost unchanged ahead of the North American session. Currently, USD/CAD is trading at 1.2604, down 0.04% on the day. BoC policy meeting looms The spotlight will be on the Bank of Canada, which holds its policy meeting later today (14:00 GMT). The bank is expected to maintain...

Canada CPI jumped to 2.2% yoy in March, accentuated by base-year effects

Canada CPI accelerated to 2.2% yoy in March, up from February's 1.1% yoy, slightly below expectation of 2.3% yoy. CPI common rose to 1.5% yoy, up from 1.3% yoy , above expectation of 1.4% yoy. CPI median rose to 2.1% yoy, up from 2.0% yoy, matched expectations. CPI trimmed...

USD Gains As Uncertainty Rises

The USD tended to gain against most of its counterparts yesterday, enjoying some safe haven inflows as coronavirus cases seem to be on the rise in a number of countries, from India to Canada. It should be noted that the USD gained despite US yields edging lower yesterday amidst...

Sentiment Cagey After Demand Concerns Hit Stocks And Crude Oil

Sentiment downbeat after Tuesday's sell-off Chinese and US equities have already decoupled, may point to bear trend ahead Crude oil key barometer for risk appetite UK CPI misses expectations but inflationary pressures building Bank of Canada and crude oil inventories among key macro events later Global shares, crude oil...

Can The Bank Of Canada Pull Off A ‘Cautious’ Tapering?

Bank of Canada likely to scale down its vast QE program today Dollar breathes sigh of relief, equities retreat as risk aversion returns Crude oil hit by triple whammy, gold capitalizes on subdued yields BoC to take its foot off the QE gas The Bank of Canada will likely become...