Morning Minutes

Central Bank Hawkishness Weighs on World Markets




A hawkish month for central bankers has wrapped up this morning with the Bank of England announcing a larger than expected interest rate increase of 0.50% to 5.00%, and the Swiss National Bank raising its benchmark rate by 0.25% to 1.75% as had been widely anticipated, continuing on from yesterday’s comments from Fed Chair Powell that the fight against inflation is not over. These comments and moves add to the general monetary tightening trend, which has been running for over a year now, continuing higher and for longer than had been previously expected by investors.

Thursday morning finds the FTSE getting knocked down 1.0% while the Dax is down 0.50%. The three main US index futures contracts are all down about 0.3%, adding to yesterday’s US index losses of 0.3% to 1.2%. Commodity action is mixed again today with WTI Crude Oil down 1.9% and Copper up 0.8%.

After the close today, the Fed is releasing results from the latest round of bank stress tests. Positive results may continue to help rebuilding confidence in the health of the US banking system in the wake of the March problems at regional banks. There is a risk, however, that negative flareups could set confidence and the recovery back.

Overnight and into tomorrow, Flash Manufacturing and Flash Service PMI reports are on the way from several countries around the world. These numbers may provide some early insight into global economic conditions heading into the summer months.

US weekly initial jobless claims came in pretty much as expected (264K vs street 260K). US existing home sales are due at 10:00 am EDT. Powell’s testimony to Congress continues today as well.

Subscribe to the Morning Minutes:

Today's earnings reports and market activity, delivered right to your inbox.

Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

Read More

Legal and Regulatory Disclosures

Terms and Conditions:
This information is for Investment Advisors only. The website is for informational purposes only and is not intended to provide a complete description of SIA Wealth Management’s products or services. Past performance is not indicative of future results. It should not be construed as investment advice or relied upon in making an investment decision. Products and services of SIA Wealth Management are only offered in jurisdictions where they may be lawfully offered for sale. The information contained in this Website does not constitute an offer or solicitation by anyone to buy or sell any investment fund or other product, service or information to anyone in any jurisdiction in which an offer or solicitation is not authorized or cannot be legally made or to any person to whom it is unlawful to make an offer of solicitation. All products and services are subject to the terms of each and every applicable agreement. It is important to note that not all products, services and information are available in all jurisdictions outside Canada.

SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, Advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIA Wealth Management Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.