Daily Alert – Wednesday 25th January 2023: Bank of Canada first to say “no more”

Mark NugentDaily Alert, Jan 2023

Daily Alert – Wednesday 25th January 2023: Bank of Canada first to say “no more”

Good evening.

The Bank of Canada increased interest rates by 25 basis points to 4.5 percent, as per the market expectation. In their commentary, the bank noted that the data is suggesting that core inflation has peaked and, critically, they will hold rates at the current level. They believe that, if forecasting is correct, they will need no additional hikes. Yay! The first bank to stop hiking rates. The CAD tanked, of course.

Elsewhere we see inflation in Australia (today) and New Zealand (last night) beating expectation, causing those currencies to rise.

Risk sentiment right now is moderately risk-off.

Last night I placed no trades.

I am watching the S&P500 closely and will check it again later tonight. Frustratingly, the EURUSD, although going in the right direction for me (long) is doing so in tiny, grinding increments, which makes it difficult to trade if you are looking for a decisive move up through resistance. The pair is not doing that, it is doing a sort-of slow climb while looking over its shoulder. That is not a buy signal.

I’ll be back tomorrow.

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