Morning Minutes

US Inflation and Bank of Canada In Focus

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World markets have been pretty steady so far this morning. US index futures are split between a 0.3% gain for Dow Futures and a 0.3% decline for NASDAQ futures as investors digest yesterday’s big 3.7% NASDAQ bounce. Overseas action was mixed wit the Dax and the Hang Seng rising 0.4%, the Nikkei flat and the FTSE down 0.2%. Commodities are climbing today with WTI crude oil up 0.8% and copper up 0.4%.

The US 10-year treasury note has remained steady in the 1.50%-1.60% area around the monthly US inflation report. Consumer prices rose 0.1% over month and 1.7% over year, in-line to slightly below expectations, which suggests that inflation pressures remain contained despite recent increases in commodity prices. Currency action has been mixed around this news with Bitcoin climbing 2.1% and trading above $55,000, while precious metals have been sliding with gold and silver falling 0.3% and 1.3% respectively.

The Canadian Dollar may be active around today’s Bank of Canada monetary policy decision, which is due at 10:00 am EDT. The central bank is widely expected to keep interest rates on hold but there is a possibility that Governor Macklem and Co hint toward future slowing of asset purchases (as they already did a bit last fall). Recall that Canadian GDP grew more than expected in Q4, several provinces are starting to ease lockdowns, and the US export market may benefit moving forward from a combination of reopenings and fiscal stimulus. Because of these factors, investors may look to the statement for additional insight into economic conditions and thoughts on monetary policy trends. Tomorrow, the European Central Bank may follow with their thoughts on conditions in Europe where lockdowns have been longer and stricter.   

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Colin Cieszynski, Chief Market Strategist

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

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