BoC rate decision coming up
The Bank of Canada’s interest rate decision is the main event of the day. Policymakers are predicted to leave rates unchanged at 0.25%. Economic growth has fired up, inflation is hot, businesses are feeling optimistic, the housing market is booming, and oil prices continue to climb. Macroeconomic projections that will be updated may provide some hints.
The CPI for September came in at 4.4% year on year, more than double the target of 2% and significantly higher than the intended range of 1-3%. Retail sales and employment data have also been very robust recently, prompting the market to reprioritize expectations of BoC tightening. Dollar/loonie has been moving up over the last sessions, following the bounce off 1.2287.
BoJ next on the radar
The Bank of Japan meeting begins today and will be completed tomorrow. The market expects the Bank to remain dovish and cut its inflation according to newly disclosed macroeconomic forecasts. The anticipation is that the new predictions will show that lift-off in interest rates won’t happen soon.
FX market remains calm
In the FX sphere, dollar/yen is diving underneath the 114.00 psychological mark and euro/swiss franc is gaining some ground after the fall to the new 15-month low of 1.0635. Compared to the previous month, orders for durable goods fell by 0.4% in September, driving the dollar index down to 93.70.
The single currency is rising marginally above $1.1600, while the pound is holding around $1.3720, finding support at the 40-day simple moving average (SMA). This is during Chancellor Sunak’s budget speech.
Despite giving up most of its gains late in the session, the S&P 500 index set a new all-time high yesterday. Coca Cola, Ford, McDonald’s, and Boeing are among the companies presenting their quarterly results today. McDonald’s stock has increased by 11% so far this year, putting the company’s market capitalization at $176.5 billion.
In other markets, WTI oil prices have been retreating below $84/per barrel after a strong bullish rally in the preceding days, while the yellow metal is moving back below $1,800/per ounce. The aussie and kiwi are waging a battle with $0.7515 and $0.7165 correspondingly.
