The Bank of Canada hiked interest rates by a quarter point yesterday. This brought the interest rates to 1.75%, the highest in a decade. The central bank also took a more hawkish stance indicating that rates might have to rise faster than expected.
Data from the Eurozone showed that the flash manufacturing and services PMI came out slightly weaker than forecast. Flash manufacturing fell to 52.1 missing estimates of 53.3 while flash services PMI fell to 53.3 from 54.5 which was forecast.
In the U.S. flash, PMI’s by Markit indicated an increase in activity on both manufacturing and services sectors. New home sales data, however, failed to match the forecasts, rising at a slower pace of just 553k during the month.
The economic calendar for the day will see the European session standing out with the ECB’s monetary policy meeting. The central bank is forecast to keep interest rates unchanged at today’s meeting. With the ECB now into the final stretch of its QE program, the ECB President Mario Draghi is expected to take a cautious stance in the statement.
The NY trading session will see the release of the durable goods orders report. Core durable goods are forecast to rise 0.5% on the month following a flat print the month before. The headline for durable goods orders is forecast to fall 1.3% after rising 4.4% the month before. Later in the evening, the U.S. pending home sales report is due.
