SIA Wealth Morning Minutes Banner

Inflation, Interest Rates, Bank of Canada and Bitcoin In The Spotlight

Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on facebook
Facebook
Share on email
Email

It’s one of those days where there isn’t one big event but rather a series of smaller events are moving selected markets.

US index futures are steady this morning ranging from flat Dow Futures to a gain of 0.3% for NASDAQ futures. Meanwhile, overseas markets have been sliding overnight with the DAX and the FTSE both falling 0.4% while the Nikkei dropped 0.3% and the Hang Seng slipped 0.1%.

Overnight, China reported mixed inflation numbers with consumer prices increasing less than expected (1.3% vs street 1.6%), but producer prices increasing more than expected (9.0% vs street 8.5%). Investors appears to be looking to tomorrow’s US consumer price inflation report (street 4.7% vs previous 4.2%) for signs of whether inflation pressures have grown enough to increase pressure on the Fed to cut back on stimulus. The US 10-year treasury note yield slipping back down to 1.50% suggests investors are responding to the Fed view that the recent rise in inflation may be transitory and distorted by the big commodity price swings of the last 18 months.

Speaking of commodities, prices are mixed again today with WTI crude oil back above $70.00/bbl and up 0.5%, while copper is down 1.25%. US DOE energy inventories are due at 10:00 this morning. The street is expecting a smaller drawdown this week (-2.0 mmbbls vs previous -5.0 mmbbls), which would be similar to last night’s API report.

With US interest rates falling indicting expectations for a dovish Fed, and oil prices on the rise, the Canadian Dollar is gaining ground on its peers again ahead of today’s Bank of Canada meeting decision and statement which is due at 10:00 am EDT. Canada’s central bank is expected to remain relatively hawkish, continuing with its plan to reduce asset purchases. In the statement, investors may look for comments on how the current round of lockdowns has impacted the economy, the prospects for improvement if and when economies reopen more fully, and any thoughts on the hot housing market.

Cryptocurrencies are on the rebound, this morning after El Salvador announced it is preparing to become the first country in the world to accept Bitcoin as legal tender. On this news, Bitcoin is up 7.0% and trading back above $35,000 while Ethereum is up 3.0% and trading back above $2,500.  

Disclaimer: 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. SIAWM 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.

Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on facebook
Facebook
Share on email
Email

At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

Colin Cieszynski, Chief Market Strategist
Market Commentary:

Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

Keep Reading

INTERNET EXPLORER NOTICE