Bank of Canada raises interest rates
On Wednesday, Bank of Canada Governor Tiff Macklem spoke in the House of Commons. According to Macklem, inflation in Canada is strong and higher interest rates will be needed in order to cool the overheated economy.
Macklem said that inflation has been brought down in recent months, however, price pressures have not eased yet. The Bank of Canada (BOC) is approaching the tightening phase, but has not yet reached it.
Tiff Macklem told MPs that the BOC is seeking to return inflation back to its target. Inflation is expected to remain fairly high until the end of this year.
Last month, the Bank of Canada raised rates by 50 basis points. It predicts that rate increases will stop from the fourth quarter of 2022 until mid-2023.
Money markets have fully discounted 25 basis points of further tightening adopted on December 7th at the Bank of Canada's next policy decision. Markets believe there is a 20% chance of a 50 basis point hike.
The issue of inflation is currently of less importance in the foreign exchange market. Thus, according to economists at Commerzbank, dollar bears will not suffer losses even on the release of optimistic nonfarm payrolls.
Yesterday at 12:16 PMObviously there has been a structural shift in the markets toward a bearish dollar position. According to economists at Internationale Nederlanden Groep (ING), current U.S. nonfarm payrolls data may not cause an inversion of this trend.
Yesterday at 12:10 PMEuropean Central Bank President Christine Lagarde stated that inflation expectations should not change. People should be confident that price growth will return to the target level.
Yesterday at 11:56 AMCentral banks have recently been stepping up measures to combat global inflation. Investors, meanwhile, are actively discussing the continuation of high price levels amid limited supply.
Yesterday at 11:30 AMThe focus is on the OPEC+ meeting and the entry into force of bans related to the import of Russian oil.
Yesterday at 12:59 PM