Morning Minutes

Central Bank Tightening and Earnings Season Starting In Focus

Bank of Canada



Central banks are in the spotlight today with accelerated tightening on the agenda. Last night, the Reserve Bank of New Zealand, who had been raising rates at a pace of 0.25% per meeting for their last few meetings and had been widely expected to hike another quarter point surprised the street with an even more hawkish 0.50% increase to their overnight rate to 1.50%.

This morning at 10:00 am the Bank of Canada is widely expected to raise its benchmark rate by 0.50% to 1.00% after raising 0.25% at its last meeting. Canada’s central bank is also expected to start Quantitative Tightening by ending the purchase of new bonds to replace maturing ones. Investors may also look to the statement and the Monetary Policy Report for indications on the outlook for the economy, inflation, and interest rates or the bank’s balance sheet.

Central banks remain under pressure to do something to contain accelerating inflation. US producer prices jumped even more than feared (11.2% vs street 10.6% and previous 10.3). UK inflation reports showed rising inflation pressures across the pond as well, most notably their consumer price report (7.0% vs street 6.7% and previous 6.2%).

A day after US indices failed to hold on to moderate morning gains turned into moderate losses by the close, US index futures had tried to rebound earlier this morning but as the exchange open approaches, futures have been fading and are currently flat to down slightly. Over in Europe, where investors are waiting to see what the European Central Bank might try and do about inflation tomorrow, the Dax is down 1.0% and the FTSE is flat.

Earnings season is underway today, led by JPMorgan Chase who missed on earnings ($2.63 vs street $2.69) and raised loan loss provisions, blaming increased risks to the economy, rising inflation and disruptions form the Ukraine War. Bed Bath and Beyond reported a large surprise loss (-$0.92 vs street +$0.03) noting that even though it did raise prices in the quarter, it wasn’t enough to offset rising costs.

SIA Wealth In The Media:

Chief Market Strategist Colin Cieszynski appeared on BNN Bloomberg today where he discussed the potential for monetary tightening in Canada and elsewhere and the start of earnings season in the US.  

Something to watch is projections on inflation from the BoC

It’s going to be more difficult for companies during time of uncertainty

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.