- July 11, 2018
- Posted by: Joey Benedid
- Category: Market News
The Dollar inched higher overnight but gains were capped as the US indicated that it would impose tariffs on an additional $200B worth of Chinese imports, furthering trade concerns. Trump will be meeting with NATO counterparts in Brussels today to discuss increasing military spend and trade. Trump has already called out Germany for not spending enough on defense as well as importing Russian oil, resulting in member nations being on edge at the commencement of the summit. The BoC will make a rate decision this morning, with the probability of a 25bps rate hike priced in at 99.2%. Investors are looking to see if Poloz carries over his hawkish tone from statements made last month.
EUR and GBP are quiet with no primary data being released today. Draghi spoke this morning in Germany, but did not provide market moving news or sentiment. Carney is slated to speak in the US later today and traders will be listening for clues on when the BoE may be looking to hike rates, which could be as early as August.
The BoC rate decision dominates the calendar today, with US data taking over tomorrow with the release of CPI (2.9% vs 2.8%) and Friday’s U. of Michigan numbers on Friday. Short term support and resistance is 1.3065 and 1.3225 respectively as we continue to trade within this week’s range, with RSI at 59 and the 200-day moving average residing at 1.2774.
UPDATE:
*BOC REITERATES FUTURE RATE MOVES WILL BE ‘GRADUAL,’ DATA-DRIVEN
*BANK OF CANADA SAYS TRADE PROTECTIONISM REMAINS A MAJOR RISK
*BANK OF CANADA SAYS CAD LOWER ON USD STRENGTH, TRADE CONCERNS
*HIGHER RATES ‘WILL BE WARRANTED’ TO RESTRAIN INFLATION: BOC
*BOC EXPECTS 2% GDP GROWTH IN 2018, 2.2% IN 2019, 1.9% IN 2020
*ECONOMY NEAR CAPACITY, INVESTMENT & EXPORTS DRIVING GROWTH: BOC
*BANK OF CANADA SEES HOUSING MARKETS ‘BEGINNING TO STABILIZE’