News & Analysis

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BoE holds rates at 5.25% in “finely balanced” decision

BoE holds rates at 5.25% in “finely balanced” decision

The BoE today voted 5-4 in favour of holding rates at 5.25% as opposed to hiking a further 25bps, with Governor Bailey playing kingmaker in the decision. read more

Swiss National Bank holds rates at 1.75% and retains preference for stronger CHF

Swiss National Bank holds rates at 1.75% and retains preference for stronger CHF

Today, the SNB held its policy rate at 1.75%, in line with our forecast but against the market and economist consensus for a final 25 basis point hike. read more

Equities giveth and Powell taketh away

Equities giveth and Powell taketh away

Yesterday, the Canadian dollar weakened by a tenth of a percent, but intraday volatility was high despite the small daily change read more

Fed signals US rates will be much higher for far longer

Fed signals US rates will be much higher for far longer

The Federal Reserve held interest rates steady today at the current target range of 5.25-5.5%, in line with their inter-meeting commentary. read more

Few surprises from the BoC’s summary of deliberations

Few surprises from the BoC’s summary of deliberations

The Bank of Canada’s summary of deliberations for September had little in terms of new information, leaving traders shrugging their shoulders. read more

Loonie bulls take profits after hot inflation numbers

Loonie bulls take profits after hot inflation numbers

We warned in yesterday’s morning report that inflation would likely come in hotter than the consensus had forecast, and indeed it did. read more

UK inflation supports one and done view for BoE

UK inflation supports one and done view for BoE

A shock deceleration in UK inflation provides good news for the Bank of England heading into tomorrow’s rate decision. read more

August’s inflation data poses a major risk to the BoC’s hold

August’s inflation data poses a major risk to the BoC’s hold

Headline inflation for August surged to 4.0% YoY in Canada, rising seven tenths of a percentage point to beat expectations for a 3.8% rise. read more

Loonie continues to outperform as oil rally is unimpaired

Loonie continues to outperform as oil rally is unimpaired

After topping the G10 FX charts last week, the loonie continued to strengthen on Monday, gaining a third of a percent against the dollar. read more

All eyes on Saudi Arabia as oil approaches $95

All eyes on Saudi Arabia as oil approaches $95

Markets will be paying close attention to a speech by the Saudi Kingdom’s Energy Minister Abdulaziz bin Salman later today. read more

Buckle in, it’s going to get bumpy

Buckle in, it’s going to get bumpy

In the coming week, the data calendar looks incredibly dense with market-moving events, including 9 major central bank policy decision announcements. read more

An improving report card

An improving report card

Having misbehaved over much of the summer period, USDCAD has begun the new school term with a much improved attitude. read more

ECB hikes and holds on for hope

ECB hikes and holds on for hope

Today the European Central Bank raised all three of its interest rates by 25 basis points, bringing the key deposit rate to 4%, in line with our expectation read more

Navigating a narrow path

Navigating a narrow path

Today, CAD traders will continue to fixate on the price of oil and how fixed income markets trade given key rate decisions out of the ECB. read more

US core inflation beats but doesn’t change the Fed narrative

US core inflation beats but doesn’t change the Fed narrative

Headline inflation reaccelerated in the US for the second consecutive month, rising from 3.2% to 3.7% YoY. read more

Loonie likely to U-turn on hot US inflation report

Loonie likely to U-turn on hot US inflation report

In order for CAD to continue climbing, we think traders will need to see another benign US inflation release which takes the Fed out of the question. read more

Loonie rally takes a breather before US CPI

Loonie rally takes a breather before US CPI

An extension of USDCAD downside will likely need tomorrow’s US inflation data to print in line with expectations. read more

The peak may be in for wages, and close for the BoE

The peak may be in for wages, and close for the BoE

Today brings with it the release of the first of two key sets of data leading into the Bank of England’s latest policy decision on September 21st. read more

Loonie rallies on stronger jobs data

Loonie rallies on stronger jobs data

The loonie has taken a beating the last few weeks, but Friday’s session saw the currency fight back, with the trend continuing once again this morning. read more

All hail King Dollar

All hail King Dollar

With growth data out of the US suggesting the consumer remains on a solid footing, the dollar reigned supreme for the eight consecutive week. read more

August job gains slows the normalisation in Canada’s labour market

August job gains slows the normalisation in Canada’s labour market

Canada added 40,000 net jobs in August, doubling the median expectation for a 20,000 increase. This fell slightly short of the increase in labour supply. read more

Jobs data could confirm BoC completion

Jobs data could confirm BoC completion

Today, loonie traders will be watching August’s jobs data. Economists anticipate a mild 20k rebound in hiring, and expect that wage growth eased to 4.7%. read more

BoC joins the RBNZ at its terminal rate

BoC joins the RBNZ at its terminal rate

The BoC’s rate statement came with few surprises. No change to the 5% policy rate, growth has slowed, core inflation is still too strong. read more

Bank of Canada surprises no one, sounds a touch too hawkish

Bank of Canada surprises no one, sounds a touch too hawkish

The Bank of Canada met our expectations in holding the policy rate at 5% today, a decision that was unsurprising given last week’s GDP data. read more

US ISM services PMI adds gas to the dollar rally

US ISM services PMI adds gas to the dollar rally

The release of August’s ISM services PMI was the marquee event for the dollar this week, and for good reason. read more

Oiling up the loonie

Oiling up the loonie

Oil markets served as the primary driver for the loonie as Saudi Arabia extended its production cuts and Russian officials announced the size of the cuts. read more

Loonie languishes again as local markets reopen

Loonie languishes again as local markets reopen

The 0.35pp pickup in USDCAD to begin this morning's session is notable, with both US and Canadian traders yet to return to the office. read more

Weak GDP numbers to lead the BoC to indefinite pause

Weak GDP numbers to lead the BoC to indefinite pause

In our view, the Canadian GDP data, showing the economy contracting 0.2% on an annualised quarterly basis, puts paid to any prospect for further BoC hiking. read more

Hike, pause, shouldn’t cut

Hike, pause, shouldn’t cut

Recent months and weeks have seen central banks around the world increasingly moving towards a data dependent stance. read more

Monex’s September 2023 FX Forecasts

Monex’s September 2023 FX Forecasts

Our Monex analysts continue to favour the greenback against yield (JPY) and growth sensitive (EUR and CNY) currencies over the next month. read more

Soft growth means the Bank of Canada is at its terminal rate

Soft growth means the Bank of Canada is at its terminal rate

Data today showed the Canadian economy came to a complete halt in Q2, with the 0.0% growth reading coming in much weaker than the consensus estimate. read more

It’s looking more likely that the Fed’s done

It’s looking more likely that the Fed’s done

The US economy added 187k jobs in August, marginally exceeding economist expectations. read more

Inflation still cooling off in the Alps

Inflation still cooling off in the Alps

Swiss inflation data out this morning is unlikely to shift the balance for the SNB’s upcoming policy announcement on September 21st. read more

Traders piling into the long CAD trade

Traders piling into the long CAD trade

Today is the day that loonie traders have been waiting for. GDP figures for Q2 will be the final test of our thesis for the BoC decision next week. read more

Loonie continues to recoup some losses

Loonie continues to recoup some losses

Wednesday’s trading was similar to the day before, with US data giving traders a reason to trim back some of the loonie’s losses. read more

ECB to hike again in September as inflation data doesn’t improve

ECB to hike again in September as inflation data doesn’t improve

Data out of the eurozone over the past week has only increased concerns over inflation persistence. read more

Soft US job openings help loonie recoup some losses

Soft US job openings help loonie recoup some losses

The latest developments in the loonie were US-driven, with the most crucial event being the release of the latest JOLTS survey. read more

Volatility is likely to return after a flat day for USDCAD

Volatility is likely to return after a flat day for USDCAD

On Monday, the loonie traded in an extremely tight range against the dollar, moving sideways for most of the day. read more

Time for the data that central banks are dependent on

Time for the data that central banks are dependent on

The market focus next week is likely to return back to the economic data, with some marquee releases scheduled ahead of the next round of policy decisions. read more

Downside in USDCAD to appear if Powell underwhelms

Downside in USDCAD to appear if Powell underwhelms

Today, price action in FX markets will likely have a better foundation as the Fed’s Jackson Hole symposium formally starts. read more

Early signs of USDCAD topping out

Early signs of USDCAD topping out

After a few days of failed attempts to break USDCAD out of its recent ranges, yesterday saw traders take a run at the 1.36 handle. read more

The next leg in a soft landing

The next leg in a soft landing

Today's PMI report shows economic conditions slowing more than expected in the US in the middle of the third quarter. read more

Clear signs of consumer softness in Canada despite better headline

Clear signs of consumer softness in Canada despite better headline

Canadian retail sales looked relatively unchanged on a headline basis in June, with receipts rising by 0.1% from the previous month to a total of $65.9bn. read more

Shifting pricing behaviour lessens feedback worries for the BoE

Shifting pricing behaviour lessens feedback worries for the BoE

Today's flash PMI reading for the UK reinforces our view that a September rate hike from the Bank of England will likely be the last of this cycle. read more

Weak eurozone PMIs dash hopes for a September hike

Weak eurozone PMIs dash hopes for a September hike

Today’s Eurozone flash PMIs confirmed what financial markets feared; that the eurozone economy was heading into recession in Q3 if it wasn’t already in one. read more

Another choppy but rudderless day for CAD

Another choppy but rudderless day for CAD

For the third trading session in a row, Tuesday’s price action in USDCAD was choppy intraday but relatively directionless overall at the close. read more

Canadian dollar stable, but in turbulent waters

Canadian dollar stable, but in turbulent waters

Volatility in USDCAD was high on Monday, although the currency pair was hardly changed by the end of the North American session, breaking a 5-day streak of gains. read more

Jackson Hole on the horizon is likely key for USDCAD

Jackson Hole on the horizon is likely key for USDCAD

The loonie continues to trade sideways against the dollar, as a slow news weekend meant there was little to catalyse moves for USDCAD. read more

Pay attention to Jackson Hole

Pay attention to Jackson Hole

Flash PMI data from key economies will provide an update on global growth conditions, but the main event will be the Jackson Hole Economic Policy Symposium. read more

Risk off moves take the loonie lower

Risk off moves take the loonie lower

While we view the recent loonie weakness as unsustainable, news that China’s Evergrande Group filed for bankruptcy could keep markets in risk-off mode. read more

Fed dovishness hold the key for USDCAD

Fed dovishness hold the key for USDCAD

Today, the only Canadian data release will be international securities transactions for June, a low-priority report. read more

Canadian inflation surprises to the upside, raising pressure on the BoC

Canadian inflation surprises to the upside, raising pressure on the BoC

Between now and the Bank of Canada decision, we do not expect the currency pair to break out of recent ranges, and view a reversal as more likely. read more

UK inflation data does little to move the needle for the BoE

UK inflation data does little to move the needle for the BoE

UK inflation data out this morning took a step lower, but marginally outperformed consensus expectations. read more

Still-hot inflation creates a headache for the Bank of Canada

Still-hot inflation creates a headache for the Bank of Canada

Canadian inflation still isn’t under control, with July’s report showing a strong uptick in headline inflation and continued strength in underlying core measures. read more

Today’s CPI signal if inflation has turned a corner

Today’s CPI signal if inflation has turned a corner

Importantly for markets will be today’s CPI report for Canada, where traders are keen to see whether core inflation has finally turned a corner. read more

An upside shock to UK wage data raises the likelihood of further BoE hikes

An upside shock to UK wage data raises the likelihood of further BoE hikes

Labour market data, out this morning, is unlikely to settle any debates for Bank of England watchers. read more

CPI key for the loonie

CPI key for the loonie

With last week's US CPI failing to spark much action for USDCAD, traders will be hoping that inflation data north of the border brings more excitement. read more

Snoozefest

Snoozefest

Next week, things should heat up a bit, as markets will receive a whole range of updates on inflation and labour markets. read more

USDCAD does a round trip as US inflation fails to surprise

USDCAD does a round trip as US inflation fails to surprise

Intraday volatility picked up after the release of US CPI data, but after all was said and done, the loonie was still where it roughly started prior. read more

US inflation comes in soft as expected, cementing the case for a continued Fed pause

US inflation comes in soft as expected, cementing the case for a continued Fed pause

Today’s CPI report appears to put another nail in the coffin for the prospects of further Fed rate hikes this year. read more

US inflation the main risk event for USDCAD

US inflation the main risk event for USDCAD

Today’s market should pick up with US CPI set for release, as markets look for confirmation that the Fed will remain on pause through year-end. read more

The calm before the storm settles on markets with US CPI coming up tomorrow

The calm before the storm settles on markets with US CPI coming up tomorrow

Today is likely to be spent looking towards tomorrow's CPI release, an event that will be critical for markets in judging the path forward for the Fed. read more

A quiet start to the week for the loonie

A quiet start to the week for the loonie

With local markets in Canada shut for a civic holiday, there was limited excitement in USDCAD on Monday. read more

Soft jobs data supports a BoC hold, but US CPI holds the key for USDCAD

Soft jobs data supports a BoC hold, but US CPI holds the key for USDCAD

While much of Friday's attention was focused south of the border, a soft Canadian number added to the growing body of evidence for a forthcoming BoC hold. read more

All eyes stateside

All eyes stateside

Looking ahead to next week, the data calendar points to a quieter week, with the biggest event risk posed by US CPI. read more

Soft jobs report reduces the risk of Q4 hike from the Bank of Canada

Soft jobs report reduces the risk of Q4 hike from the Bank of Canada

Today’s data offers a clearer signal of a true softening in the Canadian labour market, making it even more supportive of a hold from the BoC. read more

US payrolls provides something for everyone

US payrolls provides something for everyone

Today’s release of July’s US payrolls data does little to settle the Fed's hiking cycle debate as it contains something for both sides. read more

Higher unemployment rate would dash hopes of a BoC hike

Higher unemployment rate would dash hopes of a BoC hike

We expect the loonie to come back to life today due to the data risk stemming from jobs reports set for release out of both Canada and the US. read more

The end is nigh for the BoE’s tightening cycle

The end is nigh for the BoE’s tightening cycle

The Bank of England today voted 1-6-2 to hike Bank Rate 25bps to 5.25%, marking a deceleration in its hiking cycle after June’s surprising 50bp increase. read more

Loonie loses out as the US yield curve bear steepens

Loonie loses out as the US yield curve bear steepens

Much of the loonie's weak sentiment had to do with a re-steepening in the US yield curve, which equity analysts say is a poor omen for stocks. read more

Monex’s August 2023 FX Forecasts

Monex’s August 2023 FX Forecasts

With the risk of the Fed hiking once more in Q4 still credible, we expect the shallow and bumpy downtrend in the dollar to continue throughout Q3. read more

Loonie gets hit by risk-off wave

Loonie gets hit by risk-off wave

With global risk remaining under pressure this morning, the Canadian dollar continues to trade on the back foot at the start of the European session. read more

Loonie looks rangebound ahead of Friday’s payrolls

Loonie looks rangebound ahead of Friday’s payrolls

We don’t expect USDCAD to break out of its recent range until Friday’s payrolls, meaning the next few days are likely to be driven by external factors. read more

Loonie loses out as end to BoC hikes is more probable

Loonie loses out as end to BoC hikes is more probable

While markets are slowly coming around to our base case for the BoC, a further hike is still 50% priced in other the next two meetings. read more

How many more hikes?

How many more hikes?

Next week, growth conditions are going to remain front and centre with Chinese PMIs and eurozone GDP data released. read more

Firm in the face of stronger US growth

Firm in the face of stronger US growth

The Canadian dollar once again outperformed in yesterday’s session as strong US growth conditions boosted growth expectations in Canada. read more

ECB lays more dovish foundations as it vies for maximum optionality

ECB lays more dovish foundations as it vies for maximum optionality

The ECB raised its three key interest rates by 25bps, bringing the marginal lending facility to 4.5%, refinancing rate to 4.25% and deposit rate to 3.75%. read more

Loonie remains in ranges

Loonie remains in ranges

Today, the loonie is playing catch-up slightly on yesterday’s price action alongside other higher-beta currencies, although it remains in recent ranges. read more

Fed hikes to what is likely its terminal rate

Fed hikes to what is likely its terminal rate

The Federal Reserve today hiked the Fed funds target range by 25bps to 5.25-5.5%, its highest level in 22-years. read more

BoC minutes may sound more dovish

BoC minutes may sound more dovish

This morning, price action in Europe once again suggests there is a bearish CAD bias at current levels. read more

ECB’s rate hikes continue to be “forcefully” transmitted

ECB’s rate hikes continue to be “forcefully” transmitted

The ECB's Q2 Bank Lending Survey report highlighted that the monetary tightening since summer 2022 continues to be transmitted “forcefully” to the real economy. read more

Back to winning ways

Back to winning ways

While its peers still sit in the red over the course of the two trading sessions, the loonie managed to tip its nose into the green. read more

UK PMIs compound case for BoE to hike by 25bps in August

UK PMIs compound case for BoE to hike by 25bps in August

July’s preliminary PMIs out of the UK continued the theme of weaker-than-expected economic activity data out of Europe. read more

CAD flexes its defensive characteristics once again

CAD flexes its defensive characteristics once again

The loonie flexed its defensive characteristics against a stronger dollar environment last week as it effectively closed flat against the greenback. read more

Stress testing the disinflation trade

Stress testing the disinflation trade

The data calendar will further stress test the disinflation trade as a mix of central bank decisions, growth, and inflation data are all set to be released. read more

Strong retail sales to extend CAD rally

Strong retail sales to extend CAD rally

Today, the loonie is on the offensive in what is setting up to be a risk-on session, although the extent CAD's rally depends on how May’s retail sales land. read more

Expect more GBP downside on underwhelming BoE

Expect more GBP downside on underwhelming BoE

Our analysts expect the Bank of England will hike 25bp in August following weak inflation data leading to further depreciation in the pound. read more

Loonie has a midweek slump

Loonie has a midweek slump

Today, cross-asset price action is likely to once again dominate how USDCAD trades, with little data released either side of the border. read more

An inconclusive inflation report

An inconclusive inflation report

In our view, the main takeaway from yesterday’s data is that during this part of the cycle, the incoming releases are unlikely to provide a clear signal. read more

Another 50bp hike now looks less likely

Another 50bp hike now looks less likely

The last inflation report before the BoE’s August 3rd meeting provided signs of relief for MPC members this morning. read more

Mixed Canadian inflation report leaves one further hike in question

Mixed Canadian inflation report leaves one further hike in question

June’s CPI report today didn’t settle the debate over whether the BoC has hit its terminal level at 5% or whether one further hike would ensue. read more

US retail sales and Canadian CPI land in an otherwise quiet day for markets

US retail sales and Canadian CPI land in an otherwise quiet day for markets

Today, the loonie is likely to be driven by more local factors as June’s inflation report is published at 08:30 ET/ 13:30 BST. read more

Loonie lines up for key CPI report as gains become slow going

Loonie lines up for key CPI report as gains become slow going

Strength in inflation pressures this week could see CAD end the week closer to the top of the G10 pile, a marked turnaround from last week’s performance.  read more

Shocked to the core (by the core)

Shocked to the core (by the core)

Markets are likely to turn their attention now to the other potential drivers of the broad dollar. The standout one next week will be China’s growth data. read more

That’s more like it

That’s more like it

The loonie picked up some momentum on Thursday as a wave of US dollar selling continued, allowing CAD to break new ground. read more

Loonie rally underwhelms despite bullish triggers

Loonie rally underwhelms despite bullish triggers

It seems that FX traders have run out of reasons to add to bullish CAD positions, even with all the macro factors working in the loonie’s favour. read more

Bank of Canada hikes 25bps to 5%, signals greater concern about over-tightening risk

Bank of Canada hikes 25bps to 5%, signals greater concern about over-tightening risk

The Bank of Canada raised its policy rate by 25bps to 5% as expected, its highest level in 22 years. read more

Core inflation slumps, leaving the door open to just one more Fed hike in July

Core inflation slumps, leaving the door open to just one more Fed hike in July

The latest US CPI report confirms what markets had assumed earlier in the week following the decline in the Manheim used car auction prices for June. read more

USDCAD could hit fresh YTD lows on the right mix

USDCAD could hit fresh YTD lows on the right mix

The loonie's 0.3% gain against the dollar saw it sit in middle-of-the-pack within the G10, with the rally helped along by a mildly positive risk tone. read more

Preliminary positive signs open the door for a BoE deceleration

Preliminary positive signs open the door for a BoE deceleration

UK wage data has once again surprised to the upside, in an outturn that is likely to cause yet more concern amongst BoE policymakers. read more

Housing data adds to the case for BoC tightening

Housing data adds to the case for BoC tightening

With the BoC placing emphasis on housing over the past few years, officials will likely continue to signal greater concern about upside risks to inflation. read more

USDCAD is back below 1.33 ahead of BoC decision on Wednesday

USDCAD is back below 1.33 ahead of BoC decision on Wednesday

Friday proved a dramatic day for the loonie, with USDCAD falling by close to three quarters of a percent. read more

More DM central banks to hit terminal levels, while EMs eye rate cuts

More DM central banks to hit terminal levels, while EMs eye rate cuts

Scandi inflation data is likely to draw attention for traders, but the week's main event looks likely to be the latest BoC policy decision. read more

Canada’s job market is still hot, leading markets to buy into a July hike

Canada’s job market is still hot, leading markets to buy into a July hike

The Canadian economy added 59.9k jobs in June, a 0.3% increase that strongly beat the consensus estimate of 20k. read more

Slowing US employment growth casts doubt over November hike

Slowing US employment growth casts doubt over November hike

The FX market response to today’s US NFP report confirms our view that the broad dollar will likely trade in a range bound nature over a tactical horizon. read more

Canadian jobs data holds the key for the BoC’s next move

Canadian jobs data holds the key for the BoC’s next move

Our analysis suggests that today’s Canadian jobs report will likely show a solid pace of job growth. read more

Markets begin to believe Fed’s dots after a suite of US releases

Markets begin to believe Fed’s dots after a suite of US releases

Recent economic releases have forced short-term interest rate traders to price in higher odds that the Federal Reserve delivers on its June forward guidance. read more

Friday jobs data comes into focus on both sides of the border

Friday jobs data comes into focus on both sides of the border

Tomorrow's jobs data will be the crucial piece of information that could shift market pricing for the Bank of Canada meeting next week. read more

Loonie nudges lower as attention shifts to Friday’s jobs data

Loonie nudges lower as attention shifts to Friday’s jobs data

Weak data out of China has seen the loonie trade lower, as traders weigh up the possibility for more Chinese economic support to boost growth conditions. read more

Monex’s July 2023 FX Forecasts 

Monex’s July 2023 FX Forecasts 

Although the global tightening cycle is approaching its final phase, monetary policy remains one of the primary drivers of FX market price action. read more

The loonie takes off Canada day too

The loonie takes off Canada day too

Whilst Americans might be taking the day off to celebrate independence day today, Monday saw Canada day being celebrated north of the border. read more

Friday’s jobs report to tip the balance for BoC pricing 

Friday’s jobs report to tip the balance for BoC pricing 

With markets now viewing the BoC’s decision next week as a coin toss, the main event for USDCAD will indeed be Friday’s jobs report. read more

The defensive dollar is back

The defensive dollar is back

Next week the question will be if divergence in the economic surprises will continue, with jobs data out of the US and growth data out of China. read more

Flat April GDP slightly raises risk of BoC inaction but hike remains our base case with strong growth expected in May

Flat April GDP slightly raises risk of BoC inaction but hike remains our base case with strong growth expected in May

The Canadian economy didn’t grow or shrink in April, missing economist expectations for a 0.2% gain. read more

It’s a major day for BoC expectations

It’s a major day for BoC expectations

Today is perhaps the most important day ahead of the July 12th meeting, with monthly GDP and the BoC’s business and consumers surveys all being released. read more

Loonie continues to slide as yield gap re-opens

Loonie continues to slide as yield gap re-opens

The Canadian dollar weakened against the greenback for the second day in a row, with the -0.5% sell-off picking up pace from Tuesday. read more

Loonie slumps on widening rate differentials

Loonie slumps on widening rate differentials

The loonie underperformed along with a few other commodity currencies amid a sell-off in energy and agricultural commodity futures. read more

Canada CPI shows signs of improvement, but the coast isn’t clear

Canada CPI shows signs of improvement, but the coast isn’t clear

Headline inflation in Canada fell from 4.4% to 3.4% YoY in May, matching consensus expectations and largely driven by base effects. read more

CAD continues to climb ahead of CPI

CAD continues to climb ahead of CPI

The consensus expects headline CPI to fall from 4.4% to 3.4% YoY, which at first glance seems like it would be a big win in the fight against inflation. read more

Loonie hits resistance at September 2022 highs ahead of critical data week

Loonie hits resistance at September 2022 highs ahead of critical data week

In a week in which the dollar broadly rebounded against G10 currencies, the Canadian dollar’s positive return over the five days was notable. read more

The hawks take flight as Sintra looms

The hawks take flight as Sintra looms

Next week, we'll hear directly from major central bank heads themselves, as they meet in Portugal for Sintra, the ECB's annual forum. read more

Loonie squeaks out another high

Loonie squeaks out another high

With a marginal gain against the dollar, the loonie nevertheless squeaked out another fresh high since last September. read more

Bank of England hits the panic button

Bank of England hits the panic button

The Bank of England surprised markets today by reaccelerating their hiking cycle, exceeding market expectations and economist consensus. read more

Punchy retail sales, hawkish minutes, and a new high

Punchy retail sales, hawkish minutes, and a new high

The North American session kicked off with some punchy numbers, with Canadian retail sales demolishing expectations for a print of 0.4% on the headline. read more

ECB forces markets to reconsider 4% terminal rate

ECB forces markets to reconsider 4% terminal rate

The European Central Bank today raised all its key interest rates by 25bps, taking the deposit rate to 3.5%, the refinancing rate to 4% and the marginal lending facility rate to 4.25%. read more

BoC draws more attention than usual following RBA hike

BoC draws more attention than usual following RBA hike

The loonie’s gains were related to the Aussie, as market speculation that the BoC could hike later today picked up following the RBA’s surprise hike. read more

Monex’s June 2023 FX Forecasts

Monex’s June 2023 FX Forecasts

Market price action over the past month was dominated by the twin themes of political dysfunction and economic convergence. read more

Loonie jumps as rate spreads narrow

Loonie jumps as rate spreads narrow

Yesterday, the loonie rose by just a little less than a percent against the dollar, one of the strongest performances in the G10 arena. read more

USDCAD hovers around 1.36 as markets return to fundamentals

USDCAD hovers around 1.36 as markets return to fundamentals

The loonie strengthened by about 0.2% against the greenback yesterday on mildly positive risk sentiment as terms of the US debt ceiling deal were finalised. read more

Monex’s May 2023 FX Forecasts

Monex’s May 2023 FX Forecasts

With central banks in the US and elsewhere hitting the end of their hiking cycles, we see near-term policy expectations losing some impact on FX volatility. read more

Monex’s April 2023 FX Forecasts

Monex’s April 2023 FX Forecasts

Whilst our FX Analysts' March forecasts have broadly panned out, it was the driving force behind these moves that came as a surprise to them. read more

Monex’s March 2023 FX Forecasts

Monex’s March 2023 FX Forecasts

Our FX analysts expect a reversal in some of February's price action on the back of reduced upside risk to US rates and potentially reduced volatility within the space. Here's a look at the latest Monex FX Forecasts for March 2023. read more

A hangover from Friday’s payrolls

A hangover from Friday’s payrolls

Today, markets have slightly retraced yesterday’s price action, with equity futures tentatively trading in the green and a minor sell-off in the dollar.  read more

Monex’s February 2023 FX Forecasts

Monex’s February 2023 FX Forecasts

The market's repositioning has been quite aggressive to date, leading us to believe that the dollar is overdue a period of consolidation in the near-term. read more

Macro Outlook 2023: The macro climate remains challenging for investors

Macro Outlook 2023: The macro climate remains challenging for investors

Following a volatile year defined by rising inflation pressures, the macro environment is unlikely to ease up for investors in 2023. read more

Monex’s December 2022 FX Forecasts

Monex’s December 2022 FX Forecasts

Our house view has now shifted tactically neutral on the US dollar in the near term and await a shift in structural factors to trigger a secular decline in the dollar. read more

Monex’s November 2022 FX Forecasts

Monex’s November 2022 FX Forecasts

For now, our outlook on the dollar remains constructive until jobs and inflation data allow the Fed to downshift. read more

Monex’s October 2022 FX Forecasts

Monex’s October 2022 FX Forecasts

Although a high level of bond market volatility is filtering through to FX markets our analysts believe the dollar has a structural basis to grind higher in Q4. read more

Week Ahead: Fire sale in markets may not ease despite thinner data calendar

Week Ahead: Fire sale in markets may not ease despite thinner data calendar

In the week ahead, the economic calendar dies down slightly, although the start to the week might not be frictionless as traders return with the results of Italy’s latest election. read more

The not so “mini” UK budget

The not so “mini” UK budget

At today’s mini-budget, newly appointed Chancellor Kwasi Kwarteng announced a substantial easing of fiscal policy that awoke the bond vigilantes and sent the gilt curve substantially higher, led by the front-end. read more

Week Ahead: Deluge of central bank decisions populate next week’s calendar

Week Ahead: Deluge of central bank decisions populate next week’s calendar

In the week ahead, the data calendar is dominated by a torrent of interest rate decisions as nine major central banks prepare to adjust their monetary policy. The main event, however, will be Wednesday’s Federal Reserve decision. read more

Monex’s September 2022 FX Forecasts

Monex’s September 2022 FX Forecasts

Our forecasts are more bullish on the dollar as we no longer expect the Fed’s downshift to 50bps in September to be as supportive for risk conditions. read more

Monex’s August 2022 FX Forecasts

Monex’s August 2022 FX Forecasts

DXY index is likely to stay supported, owing to our expectation that the euro-area’s growth outlook will force another run on parity this month. read more

Monex’s July 2022 FX Forecasts

Monex’s July 2022 FX Forecasts

Read Monex's July 2022 FX Forecasts. Find our what our top forecasters expect for currency markets, amid ongoing recession concerns and higher inflation. read more

Spooked by services inflation, the BoE doves fall back in line

Spooked by services inflation, the BoE doves fall back in line

The Bank of England voted 6-3 in favour of raising rates by 25bps to 1.25%. The dissenters (Haskell, Mann, and Saunders) all voted to hike rates by 50bps, in order to mitigate against risks that wage growth, firms’ pricing decisions, and inflation expectations fuel persistence in above-target inflation. read more

Loonie under pressure as interest rate differentials narrow

Loonie under pressure as interest rate differentials narrow

The loonie depreciated on Friday despite a strong job market print that put more pressure on the Bank of Canada to expeditiously raise its policy interest rate. Amid this backdrop, the loonie continues to trade weaker, with losses likely to be extended should North American equity performance deteriorate further after markets cash open. read more

Monex’s June 2022 FX Forecasts

Monex’s June 2022 FX Forecasts

Read Monex's June 2022 FX Forecasts. Find our what our top forecasters expect for currency markets, amid ongoing global growth and inflation concerns. read more

Monex’s May 2022 FX Forecasts

Monex’s May 2022 FX Forecasts

Read Monex's May 2022 FX Forecasts. Find our what our top forecasters expect for currency markets, amid current geopolitical events and uncertain conditions. read more

CAD Outlook: Loonie strength to continue in Q2 on higher oil and BoC support

CAD Outlook: Loonie strength to continue in Q2 on higher oil and BoC support

The Canadian dollar has been highly sensitive to monetary policy actions and price action in global commodities over the course of Q1. Under our base case for commodities and the Bank of Canada in Q2, which envisages two 50bp hikes, we believe gains in the Canadian dollar are likely to continue. However, our flatter forecast for the BoC policy rate in H2 will likely weigh on the loonie at the margin as the pace of Fed tightening overtakes that of the Bank of Canada. read more

Monex’s April 2022 FX Forecasts

Monex’s April 2022 FX Forecasts

While the limited progress in peace talks towards the end of the month blurred the overall dollar dynamics due to a positive boost to regional risk sentiment, we still expect some of the dominant drivers of FX markets from March to remain in play in April. read more

Russia-Ukraine makes central banks think twice about hikes

Russia-Ukraine makes central banks think twice about hikes

Risk sentiment chopped and changed throughout the week as all eyes remained on Russia-Ukraine developments. This week monetary policy decisions by the FOMC and BoE are set to show similar levels of caution to the ECB, although both central banks are still expected to hike interest rates by 25bps. read more

Loonie set to limit weekly losses as energy producer stocks rise

Loonie set to limit weekly losses as energy producer stocks rise

Today, at 13:30 GMT, markets will get an update on the status of the Canadian labour market, which by all accounts is expected to show employment rose by 127.5k. The data is likely to confirm expectations of continued policy tightening by the BoC if the data prints in line with expectations. read more

Euro jolts above 1.11 as ECB surprises markets with hawkish move despite war in Ukraine

Euro jolts above 1.11 as ECB surprises markets with hawkish move despite war in Ukraine

Today’s European Central Bank decision came as music to the ears of EUR bulls. With the Russian invasion of Ukraine having materially changed the eurozone risk profile in a matter of weeks, the last thing markets expected was for the ECB - which is usually very cautious around its wording - to come out with a definitive announcement of a faster taper to their QE programme. read more

US inflation highest since January 1982, but markets unfazed

US inflation highest since January 1982, but markets unfazed

US headline inflation today printed at 7.9% YoY for February, up from 7.5% in January, to record the fastest pace of price growth in 40 years. Unlike in previous readings, however, the core reading was much more muted at just 0.5% MoM. read more

Loonie rallies off of market optimism despite sharp drop in oil

Loonie rallies off of market optimism despite sharp drop in oil

The loonie rose half a percent against the greenback on Wednesday, following a market-wide positive shift in risk sentiment. Nevertheless, CAD’s gains lagged many of its peer currencies in the G10 space, owing potentially to the limited sell-off in the loonie during risk-off periods over previous weeks. read more

EUR Update: European currencies battered by latest Russia-Ukraine headlines – is there a floor?

EUR Update: European currencies battered by latest Russia-Ukraine headlines – is there a floor?

Since the publication of our latest FX forecasts at the beginning of the month, significant developments in the Russia-Ukraine war have put increased pressure on European currencies and equities. Over the last month, the respective currencies of these nations have therefore performed even worse than the euro. The question now is; where will price action stabilise? read more

Monex’s March 2022 FX Forecasts

Monex’s March 2022 FX Forecasts

Geopolitical events are likely to continue driving FX markets in the near-term and with no clear end game as things stand, our forecasts remain under review. Our base case scenario at present is that the pace of geopolitical developments slow in March, but recent events result in a material deterioration in Europe’s macroeconomic backdrop and a still tentative risk environment. read more

EUR Update: Fluid backdrop to keep volatility elevated

EUR Update: Fluid backdrop to keep volatility elevated

The ongoing political risk in Europe means EURUSD is going to remain an easy target within the G10, while rising US Treasury yields the euro’s sensitivity to them will also be a risk. Looking over to H2, an improvement in global growth conditions will be more deterministic for the euro when the monetary outlook and political backdrop has become more stable. read more

USDCAD lower, but loonie lags peers as crude slips

USDCAD lower, but loonie lags peers as crude slips

Yesterday’s session saw the Canadian dollar advancing against USD, however it underperformed against other higher beta currencies as falling crude oil prices weighed on the petro-linked currency. Today’s focus will be on a speech by Bank of Canada Governor Tiff Macklem, as the BoC is expected to raise rates in March. read more

Weak Canadian jobs report unlikely to derail BoC tightening

Weak Canadian jobs report unlikely to derail BoC tightening

An underwhelming jobs report from Canada coupled with a robust report from the US led to a spike in USDCAD on Friday. Most of the loonie’s losses have been recuperated, however, arguably as the jobs report failed to shift expectations for Bank of Canada policy tightening: read more

Monex’s February 2022 FX Forecasts

Monex’s February 2022 FX Forecasts

Looking ahead, our FX analysts expect the dollar’s strength to be more nuanced in February and for it to be isolated against currencies where rates are likely to lag the rise in US rates. In our forecasts, this largely pertains to EUR, JPY and CNY. read more

BoC underdelivers but it took Fed Powell to force the sell-off in the loonie

BoC underdelivers but it took Fed Powell to force the sell-off in the loonie

Following the BoC’s announcement that rates are set to remain at 0.25%, the loonie reversed all of its daily gains to sit flat despite the Bank teeing up a rate hike at March’s meeting. While the Canadian dollar flirted with trading higher, such that half of its lost gains were recovered, during the press conference, the loonie’s bullish bias was soon to be crushed come the Fed meeting. read more

Loonie slides as commodity currencies lead losses vs USD

Loonie slides as commodity currencies lead losses vs USD

Traders exposed to commodity currencies such as CAD will be keeping a close eye on geopolitical developments this week, while CAD traders specifically will be focusing on the BoC this Wednesday and its updated monetary policy report. read more

BRL Outlook: Hawkish BCB to offset depreciation, but political risks may tip the balance

BRL Outlook: Hawkish BCB to offset depreciation, but political risks may tip the balance

As the year progresses, the Brazilian general elections that are set to be held in October will become increasingly relevant for FX markets given the real’s reputation of weakening in times of political uncertainty and upcoming elections. read more

UK economy finally recovers to above pre-pandemic levels of output

UK economy finally recovers to above pre-pandemic levels of output

Today's release of UK GDP data for November saw economic activity more than double the consensus estimate with a print of 0.9% MoM. In addition to this, October’s monthly GDP reading was revised upwards from 0.1% to 0.2%. read more

Monex’s 12 key market themes for 2022

Monex’s 12 key market themes for 2022

Trade ideas tend to have a short shelflife in today's market, so instead of issuing trade suggestions for 2022, we have opted to outline the main themes we think will dominate market price action in the coming 12 months. read more

US inflation near 40-year high, but financial markets are underwhelmed

US inflation near 40-year high, but financial markets are underwhelmed

Despite the US CPI release showed that headline inflation is sitting at its highest point since June 1982, the reaction in the Treasury market was counterintuitive and the dollar sold-off against its G10 peers. read more

US and Canadian labour market reactive

US and Canadian labour market reactive

Expectations for today’s US payrolls data were high after multiple sell-side forecasters revised their projections for the net employment figure upwards following the higher ADP and Homebase data from earlier in the week. read more

FOMC meeting minutes strike hawkish tone, but it’s one for the fixed income traders

FOMC meeting minutes strike hawkish tone, but it’s one for the fixed income traders

It seems today's FOMC meeting minutes is one for the fixed income traders as opposed to the FX space. For FX markets, the impact of today’s meeting minutes will likely play out over the course of the week, especially as December’s jobs data is released on Friday following bumper ADP and Homebase indicators earlier in the week. read more

Monex January 2022 FX Forecasts

Monex January 2022 FX Forecasts

Looking ahead to 2022, our forecasts have been adjusted to take into account the new sensitivities of central banks to inflation, continuing virus risks and the likely slowdown in growth in Q1. Omicron risk continues to dominate as policymakers conduct a balancing act in order to mitigate the health and economic impacts. read more

Loonie falls after the BoC renews its inflation mandate with a twist

Loonie falls after the BoC renews its inflation mandate with a twist

CAD was under pressure for most of yesterday’s session as the fall in oil amid a risk-off market resulted in commodity currencies selling off across the board. The loonie also faced its own challenge as the Bank of Canada released the details of its inflation framework review. read more

Bank of Canada formalises its implicit employment goal in new inflation mandate

Bank of Canada formalises its implicit employment goal in new inflation mandate

While today’s announcement falls in line with what economists were largely expecting and is merely a formalisation of the mandate that has been in practice since the onset of the pandemic, it is being viewed as a marginal dovish development by markets. read more

Omicroncerns clouding the monetary outlook ahead of year end

Omicroncerns clouding the monetary outlook ahead of year end

Next week’s (13th - 17th December) calendar includes nine central banks scheduled to announce their policy decisions, which means FX volatility is likely to pick up. All of which are likely to be clouded by concerns over the impact of the Omicron variant. read more

Loonie traders turn to Gravelle’s economic assessment 

Loonie traders turn to Gravelle’s economic assessment 

For today, the emphasis is on Deputy Gravelle’s economic assessment for further guidance on the economic outlook at 18:00 GMT, especially as yesterday’s meeting came without a press conference.  read more

Tight labour market brings focus back to Bank of Canada

Tight labour market brings focus back to Bank of Canada

The rapid tightening of the labour market in Canada could see the Bank of Canada turn more hawkish in the year to come, especially if wages continue to rise sharply along with inflation. read more

BoC and NBP to keep markets busy ahead of US CPI

BoC and NBP to keep markets busy ahead of US CPI

Next week’s (6th - 10th November) calendar includes a BoC meeting and an NBP meeting, along with several CPI releases including the US. While the BoC is expected to hold fire on Wednesday, Thursday’s speech from BoC Deputy Governor Gravelle will be heavily watched. read more

Lower growth profile and rising US yields call for downgraded EUR calls

Lower growth profile and rising US yields call for downgraded EUR calls

In November, significant downside risks to our November forecasts materialised, with growth concerns and rising US yields pushing EURUSD down from 1.16 to the 1.12 level. Growth concerns arose as some eurozone countries went into light lockdowns. read more

Loonie hits 7-week low as oil markets tumble and US 2-year rises

Loonie hits 7-week low as oil markets tumble and US 2-year rises

The Canadian dollar continues to slide against its US counterpart as US equities print in the red, oil markets continue to slump on news of more strategic reserve drawdowns. read more

Projected rate paths are key for NZD and SEK

Projected rate paths are key for NZD and SEK

Next week (22nd - 26th November), focus remains on how markets price central bank tolerances to inflation and global growth conditions as Covid cases begin to rise and force major nations to impose tighter containment measures. read more

Loonie stabilises as oil pressure moderates

Loonie stabilises as oil pressure moderates

A stabilisation in oil markets yesterday helped the loonie stem its losses and stabilise around lows not seen since early October. With crude now sitting just shy of $80 per barrel again, the Canadian dollar might start retracing recent losses. read more

UK CPI, labour market data keep BoE on track for December hike

UK CPI, labour market data keep BoE on track for December hike

UK CPI massively outstripped expectations to print at its highest 12-month rate since December 2011, and the month-on-month change saw the pace of price increases reach a high not seen since April 1993. While today’s data exceeded the consensus estimate from economists, it is broadly in line with the BoE’s projections, which envisage CPI peaking at 5% in April 2022 when Ofgem adjusts its price cap again. read more

Loonie recovers from Friday’s lows despite lower oil prices

Loonie recovers from Friday’s lows despite lower oil prices

The loonie is crawling back against the dollar after Friday’s 1-month high in USDCAD, as moves in Treasury markets meant the dollar is trading softer this morning. The rally in CAD comes despite crude oil prices having fallen slightly after US President Joe Biden faced even more calls to tap the Strategic Petroleum Reserve in an attempt to tackle the elevated gas prices and push back against inflation expectations. read more

US CPI keeps markets volatile following the central bank bonanza

US CPI keeps markets volatile following the central bank bonanza

Next week (15th - 19th November), CPI remains top of mind as a number of nations are set to release reports highlighting above target price growth, however, we believe these releases will have less of an impact on broader markets relative to the US release this week. Additionally, central banks from South Africa and Turkey are expected to deliver fresh rate decisions.  read more

Loonie shaken by strong US CPI print and lower crude prices

Loonie shaken by strong US CPI print and lower crude prices

No one was safe from the broad USD rally in yesterday’s market following the CPI release. USDCAD rallied close to 0.5% as the CPI release reinforced expectations of earlier policy tightening by the Fed, while on the loonie’s side, softer crude oil prices following the rising dollar undermined the petro-linked currency further. read more

US inflation tracks back above 6%, placing pressure on transitory messaging 

US inflation tracks back above 6%, placing pressure on transitory messaging 

With expectations for October’s CPI print to rise from 5.4% to 5.9% YoY already in play, today’s inflation release had to be big to disrupt markets beyond what had already been priced into the Treasury curve and in the FX space during the morning session. read more

Loonie climbs on broad USD weakness, but tight ranges form again

Loonie climbs on broad USD weakness, but tight ranges form again

The loonie was no exception to the USD weakness story yesterday and climbed some 0.15% against the greenback as crude oil prices rose, while Bank of Canada Governor Macklem hit the media to reiterate his view on inflation. Macklem stated the surging inflation is transitory but not short-lived, and reassured the BoC would keep inflation under control. read more

Loonie continues to weather broad US dollar strength as BoC set to remain hawkish

Loonie continues to weather broad US dollar strength as BoC set to remain hawkish

The Canadian dollar continues to trade in a relatively subdued manner despite the broad bounce in the US dollar last week. Expectations of the Bank of Canada remaining one of the hawkish outliers in the G10 central bank space, which is generally pushing back market expectations, is helping support the loonie. read more

ECB and Fed speakers in scope after dovish retaliation

ECB and Fed speakers in scope after dovish retaliation

Next week (8th - 12th November), despite the absence of any major central bank meetings, the focus will remain on monetary policy pricing, especially as the Fed’s media blackout period ends. Notable speeches from Chicago Fed Evans and San Francisco’s Daly will be in scope for US rate traders, while opening remarks from the ECB’s Chief Economist Lane will be top of mind for euro money markets. read more

Strong payrolls keep US front-end yields firm, boosting the dollar 

Strong payrolls keep US front-end yields firm, boosting the dollar 

Amid the dovish pushback from G10 central banks this week and the broad rally in bond markets, front-end US Treasury yields have remained fairly resilient. This theme was extended in early trading today, helping the dollar gain ground ahead of October’s payroll data. While Canada’s net employment change undershot expectations by 10.4k with a print of 31.2k, today's LFS largely met our expectations. read more

Labour force survey likely to confirm the BoC’s hawkish position

Labour force survey likely to confirm the BoC’s hawkish position

With the level of employment in Canada now back to pre-pandemic levels, and the sectoral damage from lockdown limited on an employment basis, net employment gains are likely to slow. Emphasis will therefore be on signs of a tight labour market appearing in underlying metrics such as wage growth and average hours worked. read more

Bank of England bats back market expectations, sends sterling plummeting

Bank of England bats back market expectations, sends sterling plummeting

The Bank of England today shocked markets by voting 7-2 to hold rates at 0.1% while voting 6-3 to maintain the current stock of assets at £875bn. While we largely expected the Bank to hit back against aggressive market pricing of rate hikes by holding rates, we anticipated a tighter split in the vote in order to signal to markets that tighter policy was imminent at December’s meeting.  read more

Markets turn a blind eye to Fed and ECB guidance, loonie off the lows from USD weakness

Markets turn a blind eye to Fed and ECB guidance, loonie off the lows from USD weakness

After touching its lowest point since October 13th, the loonie reversed losses to close the day out on a stronger footing yesterday after the Federal Reserve underdelivered on market expectations and broad US dollar weakness rang through FX markets. Today will be another quiet session for loonie traders today ahead of Friday’s labour market data. read more

Time to taper, but that is all from the Fed for now

Time to taper, but that is all from the Fed for now

The Federal Reserve largely met the market consensus today by announcing plans to taper its QE programme by a maximum of $15bn per month until year-end. Powell opened the door further to give policymakers greater optionality going forward. read more

Loonie trades in tight ranges ahead of the Fed

Loonie trades in tight ranges ahead of the Fed

The Federal Reserve could force USDCAD to breakout to the upside given the right mix of policy tightening and commentary from Chair Powell, however, the possibility of the Fed under delivering on a hawkish message also remains a viable risk. read more

The Canadian dollar continues to grind out gains ahead of Friday’s data

The Canadian dollar continues to grind out gains ahead of Friday’s data

This morning, the Canadian dollar is seeing more notable losses against the US dollar compared to other G10 currencies, but this is likely a retracement from yesterday’s moves. Today’s calendar is sparse for Canada, with building permits being the only data release of note at 12:30 GMT ahead of the crucial FOMC meeting. read more

Loonie struggles to continue rally to 1.22, but labour market data could change this

Loonie struggles to continue rally to 1.22, but labour market data could change this

The loonie remains trading near recent highs, but broad USD buying towards month-end reversed all of last week’s gains. With oil markets looking as if they’ve stalled just north of the $80 mark recently, and equity markets pivoting on whether they post marginal gains, the loonie’s tailwinds have seemingly weakened. read more

The central bank magic trick: turning a dove into a hawk in plain sight

The central bank magic trick: turning a dove into a hawk in plain sight

Price action in G10 FX markets this week has been driven predominantly by pricing in bond markets and the actions of central banks. This dynamic is set to continue next week (1st - 5th November) as the battle against rising inflation migrates from the Bank of Canada and the ECB  to the Reserve Bank of Australia, the Federal Reserve, and the Bank of England. read more

Loonie looks to August GDP data to assess economic performance in Q3 vs the US

Loonie looks to August GDP data to assess economic performance in Q3 vs the US

Today, loonie traders will be keeping a close eye on August’s GDP data at 13:30 BST following the slip in US growth in Q3 and the Bank of Canada’s downgrade to 2021 GDP on Wednesday. The data is expected to show the economy expanded by 0.7% MoM in August, following a tentative start to the third quarter when July’s data printed at -0.1%. read more

ECB meeting: Inflation, inflation, inflation

ECB meeting: Inflation, inflation, inflation

Despite the suppressed expectations, the ECB managed to dull the event down even further by adjusting their opening statement such that it indicates the decision would not include an assessment of the economic outlook. The lack of excitement was visible across markets, as EURUSD remained unfazed after the release of the initial rate statement. read more

Not to be left out, the BoC joins the leading pack of hawks

Not to be left out, the BoC joins the leading pack of hawks

Yesterday, all eyes switched firmly to the Bank of Canada as the central bank not only finalised its QE programme by entering the reinvestment stage but also brought forward its expectation of when the output gap would close from H2 2022 to “the middle quarters of next year”. read more

Bank of Canada ends QE and emboldens hawkish market pricing 

Bank of Canada ends QE and emboldens hawkish market pricing 

The Bank of Canada today announced that it would taper its QE programme by a further C$1bn a week, therefore entering the reinvestment stage, while it also brought forward its forecast for the output gap closing from H2 2022 to “the middle quarters” of next year. read more

UK budget: Sunak saves part of the fiscal windfall with 2024 election in mind

UK budget: Sunak saves part of the fiscal windfall with 2024 election in mind

Today’s long awaited Autumn budget was a damp squib for FX markets given that the majority of the fiscal pledges were announced in advance of the formal unveiling. The net impact of today’s budget is lower bond issuance going forward, with the OBR now projecting £154bn less in borrowing over the following 5-years. read more

Loonie’s tight ranges set to be broken by key BoC meeting

Loonie’s tight ranges set to be broken by key BoC meeting

The loonies’ tight ranges are likely to be broken today as the Bank of Canada updates investors with its latest policy decision and economic outlook. While we expect larger moves in USDCAD relative to other trading sessions this week, the loonies’ slight depreciation trend may not reverse should the Bank not accompany the end to their QE programme with a more hawkish outlook for rate hikes. read more

Loonie volatility is limited ahead of the Bank of Canada meeting

Loonie volatility is limited ahead of the Bank of Canada meeting

The Canadian dollar struggled to hold onto the oil rally yesterday as it slipped at the margin against the US dollar. With very little in the way of economic data today, and the Bank of Canada scheduled tomorrow, today’s session is likely to be the calm before the storm. read more

This week’s BoC meeting could give loonie rally fresh legs

This week’s BoC meeting could give loonie rally fresh legs

The Canadian dollar starts this week on the front foot as oil markets climb to $85.50 per barrel, but the loonie remains far from last week’s highs. A hawkish Bank of Canada meeting may tip the balance in favour of the loonie, although a further taper of the QE programme to the reinvestment level of C$1bn a week is unlikely to be marked as hawkish. read more

Central banks to take centre stage ahead of crucial GDP readings

Central banks to take centre stage ahead of crucial GDP readings

A flurry of central bank meetings take will place across the globe next week (25th - 29th October), while Q3 GDP prints from the US and eurozone will take centre stage on Friday. Several countries will also release inflation readings. Among the central bank meetings are the Bank of Canada, the Bank of Japan and the European Central Bank - in order of importance. read more

Loonie weakens on oil retreating from multi-years high

Loonie weakens on oil retreating from multi-years high

With both Brent crude and WTI taking a leg lower yesterday however, while the market mood was not supporting the loonie either, USDCAD gained around half a percentage point on the day. Some of those gains have been pared back this morning, but looking at the remainder of the day any changes in FX direction should come from broader macro flow given the lack of noteworthy data releases from Canada. read more

USDCAD falls to lowest level since June following upbeat market mood

USDCAD falls to lowest level since June following upbeat market mood

The Canadian dollar continued its climb against the dollar yesterday to reach new highs not seen since July as crude oil prices ticked up higher and risk sentiment remained supportive, while this morning, the loonie climbed up further to June levels. read more

CAD continues to find support in oil rally and weaker USD 

CAD continues to find support in oil rally and weaker USD 

Today’s focus turns to CPI inflation from Canada at 13:30 BST, which will be viewed in light of next week’s policy decision. Expectations for the YoY print are set at 4.3%, slightly higher than August’s 4.1% reading, while the MoM figure is expected to remain unchanged compared to last month, non-seasonally adjusted. read more

Loonie shielded by robust oil prices while USD weakens

Loonie shielded by robust oil prices while USD weakens

The loonie was shielded by strong oil prices in yesterday’s session and managed to withstand pressure from the greenback, while the drop in oil prices during the latter part of yesterday’s session did little to dent the loonie as the US dollar weakened simultaneously and crude oil prices remain significantly high in broader terms. read more

EUR Update: Euro weighed down by near-term factors, medium-term outlook rosier

EUR Update: Euro weighed down by near-term factors, medium-term outlook rosier

While September’s losses were significant at over 2%, we expect the pressure on the euro to ease over the coming months as supply pressures mitigate, which should help to cool inflation and aid growth conditions. We expect the combination of these developments to be supportive for EURUSD. read more

CAD losses limited by strong oil prices despite cautious market mood 

CAD losses limited by strong oil prices despite cautious market mood 

At 15:30 EDT today, the Bank of Canada releases its Q3 Business Outlook ahead of the October 27 policy meeting which comes with fresh projections. Markets will take the survey as an important indicator of what to expect for next week’s meeting. read more

Economic activity and inflation data put stagflation fears to the test 

Economic activity and inflation data put stagflation fears to the test 

Next week (18th - 22nd October), the data calendar revolves around October’s preliminary PMI prints, while China’s Q3 GDP data also scans as one of the more interesting releases. The focus on activity data is likely to be heightened given growth concerns over previous weeks and the impact higher input costs are having. This is especially the case in the eurozone, UK, and China, where rising energy costs are the most pronounced. read more

USD Update: Defiant dollar in Q4

USD Update: Defiant dollar in Q4

Amid the global backdrop of lower growth and higher inflation, the dollar is likely to stay well bid in Q4. However, our latest forecasts now see the DXY index trading a percentage point lower than current spot levels and back towards highs of its previous trading range as the aggressive repricing in FX markets overextended in early October given our views on back-end US rates this year. read more

Big miss in ZEW fails to dent EURUSD as G10 yields moderate

Big miss in ZEW fails to dent EURUSD as G10 yields moderate

Today’s miss in the German ZEW data highlights how German activity is struggling to expand at the start of Q4 as current conditions are no longer improving. The current situation gauge tumbled from 31.9 in September to 21.6 in October, well below expectations of 28.5. EURUSD escaped the lack of optimism spilling into FX markets despite the big miss in today’s ZEW data, as at the same time yields in G10 markets have been moderating today after yesterday’s dramatic climb higher. read more

Macro backdrop of slower growth and rising inflation set to dominate FX markets

Macro backdrop of slower growth and rising inflation set to dominate FX markets

Next week (11th - 15th October), with a limited data calendar, markets are likely to continue focusing on the inflation backdrop and the impact it will have on growth conditions. We take a brief look at the environment in Europe this week and what it means for ECB and BoE pricing. read more

Diverging labour reports play out in North America

Diverging labour reports play out in North America

It was our expectation that today’s Canadian and US labour market reports would show a stark divergence, not only in net employment but also in underlying metrics. This ultimately played out, with the US jobs market adding 194k jobs in September compared with expectations of a 500k increase, while Canada added 157.1k jobs relative to expectations of just a 60k net employment gain. read more

Grappling with the stagflationary backdrop

Grappling with the stagflationary backdrop

Next week (27th September - 1st October), the focus shifts from policy announcements to individual central bankers. The RBA, RBNZ and NBP will have to announce their policy decisions given the latest downturn in the global economic outlook, while on the data front, US and Canadian labour market data stands out. read more

From policy announcements to central bank speakers

From policy announcements to central bank speakers

Next week (27th September - 1st October), the focus quickly shifts from policy announcements to individual central bankers as a swathe of speakers fill the economic calendar, largely due to the ECB’s forum on central banking taking place between the 28th and 29th of September. Rather than being in Sintra (Portugal) as has been customary, the event will take place online. read more

Bank of England delivers hawkish surprise, even by the markets standard

Bank of England delivers hawkish surprise, even by the markets standard

The Bank of England today voted unanimously to keep the Bank Rate at 0.1%, while members voted 7-2 in favour of continuing with its existing QE programme. The shift in the QE vote, from 7-1 to 7-2 due to Ramsden joining Saunders in dissenting, set the tone for what was to be a hawkish set of meeting minutes despite their Q3 GDP projection being downgraded by around a percentage point. read more

Fed signals faster tapering in 2023 but under-delivers on next year’s dot plot

Fed signals faster tapering in 2023 but under-delivers on next year’s dot plot

For those looking for an explosive Fed meeting, they may have initially been disappointed by the alterations in the dot plot. However, Powell’s comments meant volatility wasn’t absent in the FX space, with the likes of EURUSD swinging within a 0.55% range and USDJPY climbing over half a per cent higher on the day.  read more

Central bank bonanza

Central bank bonanza

The 20th - 24th September is packed with central bank meetings, with the FOMC’s decision on Wednesday eyed as the most important economic event by markets. On top of that, the Bank of England is set to release their latest policy decision, while the Norges Bank is expected to be the first G10 central bank to raise rates since the pandemic. read more

Inflation to sit top of mind next week

Inflation to sit top of mind next week

Next week’s data calendar focuses heavily on inflation data in major developed market economies, while core CPI readings from Poland and inflation expectations data in Turkey will be viewed amid historically high CPI readings. read more

Central banks set to stretch hawkish wings 

Central banks set to stretch hawkish wings 

Next week, price action in US fixed income markets will continue to garner a lot of market attention, while increasingly hawkish central bank developments will also be in scope. Of note is the Reserve Bank of Australia, who we expect to press on with tapering their QE programme, the Bank of Russia who are expected to hike by 50bps, the National Bank of Poland who will battle with record high inflation, and the European Central Bank. read more

Focus shifts from Jackson Hole to US jobs data

Focus shifts from Jackson Hole to US jobs data

In the week beginning Monday 30th August, the market’s emphasis shifts to monitoring the severity of the latest Covid-19 waves driven by the delta variant, the economic impact they are having via timely data points, and August’s Nonfarm Payrolls data next week. Fixed income and money markets will be taking their cues from the latest payroll data in order to price expectations of September’s Fed meeting. read more

Jackson Hole arrives after a volatile week for macro conditions

Jackson Hole arrives after a volatile week for macro conditions

With a tentative macroeconomic backdrop, next week’s data is likely to have a larger market impact than usual, especially with the quantity of preliminary PMI releases for August. The Fed’s annual Jackson Hole symposium should provide markets with a bit more clarity as to its tapering timeline. read more

One week closer to Jackson Hole

One week closer to Jackson Hole

Markets are likely to settle somewhat as they await the headlines from the Jackson Hole symposium on August 27th. Next week’s calendar suggests there may be pockets of isolated volatility with policy decisions from both the Reserve Bank of New Zealand and the Norges Bank, while the Reserve Bank of Australia and Federal Reserve both publish meeting minutes. read more

To hike or not to hike, that is the question

To hike or not to hike, that is the question

Markets this week have largely focused on underlying growth conditions, FOMC speakers and Friday’s labour market data, with US bond markets sending conflicting signals to FX traders. Next week (9th – 13th August), the key pieces of data centre around rate decisions from Banxico and the CBRT, both of which have reasons to hike rates due to rising inflation but also have grounds to stay pat.  read more

Canadian employment underperforms, but it isn’t all bad

Canadian employment underperforms, but it isn’t all bad

July’s employment data out of Canada saw the economy add 94,000 jobs. While on the surface, the slip looks seismic, the nature of the job additions and the stage in which the Canadian labour market recovery is at means the underperformance of the net employment data isn’t as concerning as the headline suggests. read more

Bank of England in focus after inflation overshoots and labour market progress   

Bank of England in focus after inflation overshoots and labour market progress  

Next week, the focus will be on the Bank of England to announce its policy decision and comment on the recent inflation overshoots and recovery in the labour market. read more

Q2 GDP data and the Fed are in focus amid a global third wave

Q2 GDP data and the Fed are in focus amid a global third wave

Markets will pay close attention to commentary by Chair Powell and the Fed’s assessment of current conditions. A first glance at economic performance in advanced economies in Q2 is also pinned for the week, although growing fears over the coming months might cloud the impact positive GDP figures have on markets. read more

ECB guidance to take centre stage next week, CBR set to hike rates

ECB guidance to take centre stage next week, CBR set to hike rates

The ECB takes centre stage next week, with a revamped strategy review setting the tone for a persistently more dovish course of action in the months to come, while the CBR is set to hike rates further amid a light data calendar. read more

Central banks in focus next week after Fed’s hawkish shift

Central banks in focus next week after Fed’s hawkish shift

Next week will be critical to assessing the way forward as a fresh batch of inflation data is released and several central banks face the press cameras. On the side, political developments might add excitement to markets. read more

Monetary policy in scope with FOMC minutes and ECB strategy review

Monetary policy in scope with FOMC minutes and ECB strategy review

This week (5th - 9th July), the meeting minutes from the Fed’s June meeting will be scoured by market participants as they try to gain a clearer view on future US interest rates, and the ECB’s Governing Council is set to also meet next week in Frankfurt to discuss the ongoing policy review. read more

First Nonfarm Payrolls since Fed may cause significant volatility

First Nonfarm Payrolls since Fed may cause significant volatility

Last week, volatility in FX markets was largely driven by the hawkish shift by the FOMC, as broad dollar moves drove price action in G10 currency pairs. This week, the focus remains largely on the US, with the release of the first Nonfarm Payrolls report since last week’s Fed meeting. read more

Markets to tune into FOMC speakers after the Fed’s hawkish shift

Markets to tune into FOMC speakers after the Fed’s hawkish shift

The focus next week will now be on US data and whether that can live up to the expectations set by the Federal Reserve, while a few FOMC speakers will provide markets with a bit more clarity on their position on the economic outlook.  read more

A week of central bank decisions but the Fed will draw most of the focus

A week of central bank decisions but the Fed will draw most of the focus

The Federal Reserve, Central Bank of the Republic of Turkey, and the Central Bank of Brazil are likely to be the most exciting on this week's agenda. Over the weekend, events in the UK will focussed on the government’s decision to stick to its June 21st reopening plan as cases of the delta variant rise.  read more

It is all about PEPP

It is all about PEPP

Looking ahead, central banks will come back to the fore next week with the European Central Bank, the Bank of Canada, and the Bank of Russia releasing their latest policy decisions. The ECB is likely to steal the show as speculation over the next PEPP decision rises. read more

All eyes on US and Canada labour market data after underwhelming April reports

All eyes on US and Canada labour market data after underwhelming April reports

Next week (31st - 4th June), the focus turns to labour market data from the US and Canada after April’s underwhelming reports. Also on the agenda are policy decisions from the RBA and Reserve Bank of India and China’s official manufacturing PMI. read more

Limited top-tier economic data puts USD dynamics further into focus

Limited top-tier economic data puts USD dynamics further into focus

Next week (24th - 28th May), the economic calendar is light on major market-moving events. US PCE inflation stands out as the most high profile data point on the calendar along with the latest RBNZ rate decision, while the focus will remain on central bank speakers. read more

European vaccine rollout takes centre stage while developing countries struggle with a dire Covid situation

European vaccine rollout takes centre stage while developing countries struggle with a dire Covid situation

We continue to track the evolution of the vaccine rollout in major economies, as a timely gauge of potential reopening and global economic recovery. In this edition, we highlight the European efforts to catch up with front-runners like the UK and US, while stressing the dire picture in some emerging markets. read more

A post Brexit Britain leaves sterling at the mercy of Covid-19 developments

A post Brexit Britain leaves sterling at the mercy of Covid-19 developments

The stale nature of Brexit developments over the course of Q4 means it has been some time since our last GDP outlook. In the latter stage of 2020, despite Covid-19 developments, the pound continued to trade based off no-deal Brexit risk as the clock wound down and negotiations stalled. read more

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