The Bank of Canada today held its target for the overnight rate at 4½%, with the Bank Rate at 4¾% and the deposit rate at 4½%. The Bank is also continuing its policy of quantitative tightening.
Key events in the week ahead include the minutes of the last FOMC meeting as investors see now higher rates for longer after the economic data released the previous week. Markets now see a terminal rate of 5.28%
Here are the US CPI year-over-year estimates that will be released later today:
An interesting week starts with investors focusing on the CPI report, retail sales and industrial production data.
Main events this week include the Bank of Canada interest rate decision, German GfK and Ifo surveys, European S&P Global PMI’s, US PCE Price Index and US Durable Goods Orders
Euro started the week almost unchanged at 1.0831, but there are some events that will affect the price of the common currency. On the macroeconomic data, I expect to see some improvement in German CPI and the Zew surveys.
GBPUSD trades higher on better-than-expected economic data released earlier today. The UK economy expanded by 0.1% in November 2022 well above the forecasts for a 0.2% contraction.
The week start with risk-on sentiment as investors speculate after the NFP data that Fed will not be aggressive on rate hikes. Inflationary pressures are weakening and so the focus this week will be on the CPI figures
EURUSD slumps in early European trading as traders return to their offices after the New Year festivities. EURUSD is down 1.11% at 1.0546 hitting the lowest level since December 13
Investors looking for a better year after a disaster for many assets in 2022. You can read How Markets Performed in 2022. On Monday stock and bond markets will be closed
