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Fed policy is growing more restrictive. Fed Funds Target Rate, % Quarterly Refunding Announcements have been moving markets. USDCAD, DXY, EURUSD exchange rates, % change British inflation rates are coming down faster than previously anticipated. Consumer Price Index, annual change, %, SA
Consolidative trading patterns are dominating markets this morning as participants prepare for a banger of a week. Tomorrow’s euro area gross domestic product, US consumer confidence, and job openings prints will help set the tone before Wednesday brings Canadian gross domestic product numbers, the Fed’s preferred wage cost measure, the Treasury’s quarterly refunding announcement, and a Federal Reserve meeting. Updated euro area inflation data and the Bank of England’s latest decision will drop on Thursday ahead of Friday’s January’s non-farm payrolls report. The greenback is holding steady, defying a slight drop in yields, equity futures are stable, commodity prices are...
Markets are treading water ahead of US fourth-quarter growth data. Ten-year Treasury yields are holding near 4.16 percent , the dollar is almost unchanged, and key commodity prices – including the major oil benchmarks – are up slightly. Equity markets – key to the dollar’s outperformance over the last year – are setting up for a weaker open after Tesla Inc. missed earnings guidance and said it would grow more slowly this year. Surprising no one monitoring trade flows, Elon Musk warned that Chinese competitors would “demolish” Western automakers without the imposition of protectionist policies on the industry. The Canadian...
• Positive tone. Equities & commodities higher. US bond yields rose. EUR, GBP & NZD firmer while the AUD has range traded over the past 24hrs.• China & tax cuts. Policymakers in China cut the RRR. Locally, changes to stage 3 tax cuts could see more relief flow to low/middle income earners.• ECB & US GDP. No change expected from the ECB. But will it push back on rate cut pricing? US GDP should confirm another solid quarter of growth. A generally positive mood across markets overnight. Equities rose with the S&P500 (+0.2%) touching a new record high. The EuroStoxx50...
The Bank of Canada set the stage for rate cuts. Overnight Index Swap-implied change in policy rate, % US growth and rate expectations keep rising. Consensus 2024 gross domestic product growth forecasts, % But other economies might be bottoming. Composite purchasing manager indices, >50 = expansion, <50 = contraction ECB policymakers will likely punt rate cuts to June. M3 Money Supply, Adjusted Loans to Households, Adjusted Loans to Non-Financial Corporations, 12-month % change, NSA Inflation could impact March rate cut odds, moving the dollar. Implied likelihood of a March rate cut v. USDCAD exchange rate