There were no major moves during the Asian trading session, however we have some events today, which may affect the sentiment in the market.
Canadian economy demonstrates momentum
In October, the Canadian economy managed to surge at a faster-than-anticipated tempo, although evidence of economic momentum heading into the end of 2018 might not be enough to get the country’s key financial institution out of the sidelines because of the recent dive in crude.
In October, the country’s GDP headed north by 0.3% from the previous month, underpinned by strength in insurance, manufacturing, and finance. That’s what Statistics Canada data revealed.
Market experts had hoped that monthly GDP would tack on by up to 0.2%.
Since October, the price of crude, which appears to be one of the country’s key exports, has gone down nearly 40%.
Since July last year the Bank of Canada has had its benchmark interest rate lifted up to five times bringing it to the reading of 1.75%. However, hopes for further tightening were confounded after Canada’s main financial institution left rates intact earlier this month and hinted that the tempo of future lifts could be more gradual.
Financial markets count on 14 basis points of tightening in 2019, in contrast with 43 basis points prior to the December policy announcement.
Market experts still hope annualized fourth-quarter surge would fall short of the major bank’s 2.3% forecast because of crude production trims.
As some market experts pointed out, the data gets along with their 1.7% forecast for Q4 GDP. However, they will require reliable news outside the energy sector to have that mark reached.
On Friday, the Canadian dollar went down reaching a 19-month minimum of 1.3564 to the evergreen buck due to the fact that pressure on equities and the price of crude compensated the firmer-than-anticipated GDP leap.
According to separate data from Statistics Canada, the value of the country’s retail trade managed to leap by 0.3% in October the previous month due to higher sales at car dealers as well as gasoline stations. Market experts had predicted a 0.4% rally.
The risk sentiment remains under pressure after the comments by China about the countermeasures against the US tariffs. Thus, the AUD/USD and the USD/JPY pairs will be under our attention.
During the European trading session, both the US and the UK yield curves inverted.
On Tuesday, crypto assets dived, with Bitcoin decreasing below the psychologically crucial $5,000 mark for the first time this year…
In July, Britain's inflation rate rallied for the first time in 2018, thus leaving many UK households feeling quite squeezed by prices, soaring at nearly the same tempo as their wages…
Welcome to Tuesday, people! Here’s your markets update ahead of the European trading session.