Morning Minutes

Consumer Prices and Central Banks In the Spotlight Today

Bank of Canada

Share:

Facebook
Twitter
LinkedIn
Email
Print

US index futures had been trying to mount a comeback this morning, but the bottom has fallen out and gains have quickly turned into losses following the release of a red-hot US consumer price inflation report.

US inflation continued to ramp up in June, keeping pressure on the Fed to continue its program of interest rate increases. Headline consumer price inflation for June jumped up even more than feared (9.1% vs street 8.8% and previous 8.6%). Core inflation, excluding food and energy, was higher than expected but could be starting to level off (5.9% vs street 5.7% and previous 6.0%).  

Other central banks have remained hawkish and in tightening mode. Overnight, the Reserve Bank of New Zealand announced another 0.50% rate increase, as had been widely anticipated, and maintained its commitment to getting inflation back down into its target range, even while recognizing economic risks.

The Bank of Canada is widely expected to announce a 0.75% interest rate increase at 10:00 am EDT today. Investors may look to the statement for commentary related to stagflation, and if there are any hints related to how long or how fast the central bank may continue to increase interest rates.

US index futures are currently down across the board with Dow futures falling 1.0% and NASDAQ futures dropping 2.2%. European markets are down as well with the Dax falling 1.7% and the FTSE sliding 1.1%. The US 10-year treasury note yield has climbed back up above 3.0% on the inflation news, pushing the US Dollar higher and the Euro down almost to par. The Canadian Dollar is holding steady relative to the US Dollar but could be active around the Bank of Canada decision. Gold is now down about 1.0%. Commodities are also retreating again this morning with WTI crude oil down 1.2% and copper down 0.8%.

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
ccieszynski@siawm.com
+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.

INTERNET EXPLORER NOTICE