Very little action on the Canadian dollar yesterday, as attention today turns to Bank of Canada governor Tiff Macklem’s speech at the Public Policy Forum, in Toronto. The event does allow audience questions and so traders will be watching to see signs of any evolution in Macklem’s thoughts on Canadian monetary policy.
The failure of the Republicans to secure the much-speculated ‘Red Wave’ in the US midterm elections has meant markets are no longer expecting any significant economic policy changes from the US government, and the greenback has strengthened in light of the news. Although final results are not yet in, it looks as though the Republicans will take a slim majority in the House of Representatives, with the Senate race still too close to call. With the Democrats still controlling the Executive through the Presidency of Joe Biden, overall sentiment is that the Democrat party has survived what at one stage was expected to be a bloodbath of their political influence. Market focus will now turn back on to the data calendar, with today’s release of consumer price inflation figures, which are expected to fall on an annualised basis from 8.2% to 7.9%, going to be front and centre of traders thoughts.
Nothing on the wires yesterday as markets await some secondary tier economic data today, with the release of Italian industrial production figures and an economic bulletin from the European Central Bank this morning. EUR has adopted a weaker tone over the past 24 hours, albeit in the context of having strengthened since the start of the week.
A speech by Bank of England policy maker Sir Jon Cunliffe failed to provide any fresh colour on UK monetary policy yesterday, and an auction of 10 year bonds from the UK proceeded without any fireworks, and so there was little news to spark interest in the pound yesterday. GBP did follow the general market trend by dropping around 1% against USD, but gained ground against EUR, albeit remaining firmly within the past months trading range.