Canadian Dollar is trading as the strongest one so far for today as BoC delivered a hawkish rate hike. In short, BoC talked down the sharp fall in head line CPI in September. Also, it maintained a tightening bias and expects to continue to raise interest rate to neutral level. Dollar and Yen follow as the next strongest, partly thanks to weakness of European majors.
Euro leads European majors lower on weak PMI data. Markit even said in the release that current reading is consistent with easing bias of ECB. German-Italian spread also widens to above 320 as Italy insists on its budget plan despite EU rejection. Sterling is weighed down by Brexit impasse. Swiss Franc follows as the weakest.
Technically, a new development is the sharp fall in USD/CAD, which suggests rejection by near term channel resistance and deeper fall should be seen back towards 1.2781 low. EUR/USD, EUR/JPY, GBP/USD, GBP/JPY are staying near term bearish for further decline. AUD/USD fails to break through 4 hour 55 EMA and may pick up downside momentum for 0.7040 low.
In the US markets:
- DOW dipped to as low as 24904.47 but is now at 25138, down -0.17% only. There is no committed selling.
- S&P 500 is down -0.64%
- NASDAQ is down -1.07%.
- Treasury yields are in red too. 5-year yield down -0.40, 10 year yield down -0.38, 30-year yield down -0.019. Resilience seen at the long end again.
- Gold is back below 1230, thanks to Dollar’s strength
In Europe:
- FTSE closed up 0.11% at 6962.98, thanks to Sterling’s dive
- DAX lost -0.73% to 11191.63
- CAC dropped -0.29% to 4953.09
- German 10 year bund yield was down -0.0114 to 0.4, defending this key psychological level
- Italian 10 year yield gained 0.0359 to 3.616.
