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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,
An escalation in Chinese stimulus efforts is helping boost global asset prices this morning, driving equity indices, commodity prices, and risk-sensitive currencies higher ahead of the North American open. The greenback is weaker, Treasury yields are slipping, and oil prices are holding steady in still-oversupplied markets. In an unexpected step, the People’s Bank of China announced it would lower the amount of reserves banks need to hold against their deposits for the third time in a year, potentially unlocking roughly 1 trillion yuan in new lending capacity. The move, which comes after a raft of securities purchases by China’s “national...
• Mixed markets. US equities a little higher, with long-end bond yields also rising. USD firmer against EUR & GBP. AUD consolidated near ~$0.6580.• China stimulus. Reports of measures aimed at supporting equities gave Chinese stocks & CNH a shot in the arm. BoJ holds steady but gave a ‘hawkish’ hint.• NZ CPI. Headline NZ inflation slowed as expected, but domestic inflation remains sticky. AUD/NZD dipped post this mornings NZ CPI release. A varied performance across markets over the past day, though most moves have been modest. US equities ended the day higher. The S&P500 (+0.3%) is just shy of...
After a strong start to the year, rallies in US equity markets and the dollar appear to be nearing exhaustion this morning. S&P 500 futures are pointing to a flat open and the greenback is inching higher on a stabilization in ten-year Treasury yields above the 4.1-percent threshold. The Canadian dollar is drifting lower as traders brace for a cautiously-dovish central bank decision tomorrow. The Japanese yen is modestly stronger after the Bank of Japan left policy settings intact yet signalled a move out of negative rates territory was still in the offing. Policymakers left the short-term benchmark rate at...
• Subdued markets. US equities added to their gains, bond yields drifted a bit lower, & the USD ticked up. AUD slipped back towards ~$0.6570.• BoJ decision. No changes by the BoJ anticipated today. But there is always scope for a surprise. If it were to occur, the ‘under-valued’ JPY would lift.• NZ inflation. Q4 NZ CPI due tomorrow. Inflation slowdown set to extend. A large drop could reinforce RBNZ rate cut views, a support for AUD/NZD. It has been quiet start to the week across markets. This isn’t surprising given the lack of economic data releases and with members...