For the most part, it’s a quiet morning for world markets. US index futures are flat, after trading flat to up 0.3% yesterday. The Dax and FTSE are also holding steady this morning. An up and down week for commodities finds WTI Crude Oil on an upswing, gaining 1.0%, while Copper is up 0.4%.
Currency action is mixed with the US Dollar falling against other paper currencies, like a 0.25% decline relative to the Euro. The greenback is climbing, however, against alternative currencies, rising 0.2% against Gold and 0.5% against Bitcoin.
The Canadian Dollar is currently up 0.1% ahead of today’s Bank of Canada interest rate decision and statement, which are due at 10:00 am EDT. Governor Macklem and co are expected to hold the benchmark rate steady at 4.50% again. Although the Australians stunned the market with a surprise 0.25% rate hike yesterday, investors should note that Canadian economic data announced yesterday, Ivey PMI and Building Permits were significantly softer than expected.
Canada’s trade surplus exceeded expectations ($1.9B vs street $0.9B). Overnight China reported mixed trade numbers with a worse than expected decline in exports but a smaller than feared decline in imports. Either way, the China data indicates the global economy and resource demand remains sluggish, which may be seen as neutral at best for commodity prices and the Canadian economy.
In addition to the interest rate decision, investors may look to the statement for indications of how both the Canadian economy and the broader North American economy are doing in terms of GDP growth, financial stability and inflation for takeaways that may influence anticipation of whether the Fed may pause its rate hike program when the FOMC announces it’s next decision and releases forecasts a week from today on June 14th.
