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Plus Get Market Makers AI Forex Trading Software At Our Best Price Yet!Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â Í â MARKET MAKERS DAILY BULLETIN Hello investor The Bank of Canada shocked the markets with a rate hike after pausing for a while. Why? The economy is running too hot. The countryâs central bank hiked rates to 4.75% on Wednesday, bringing rates to the highest level since 2001. The surprise hike led to a small sell-off in the American stock market. The bank said âexcess demandâ remains stubbornly high as a justification for its new rate hike. - âOverall, excess demand in the economy looks to be more persistent than anticipated,â the bank said in its rate statement. It was the first rate hike since its pause in January. However, the bank already warned that further rate increases may be required. Officials said there was âaccumulation of evidenceâ that the rates arenât restrictive enough. Some examples include strong first quarter output growth, rising inflation and a bounceback in housing-market activity. - âMonetary policy was not sufficiently restrictive to bring supply and demand into balance and return inflation sustainably to the 2% target,â the bank said. The central bank pointed to the 3-month moving average for inflation as a worrying sign. In the graph below, you can see the average plateaued in the last few months: - âConcerns have increased that CPI inflation could get stuck materially above the 2% target,â central bank officials said. The bank didnât share much about its future outlook, so itâs unclear whether the bank will keep hiking rates or not. Based on its statement, the bank hinted that it would be data dependent from now on by measuring excess demand, inflation expectations, wage growth and corporate pricing behavior shake out over the time. - Itâs âpossible that we could see a follow up hike if signs of economic slack opening up arenât clear in forthcoming data,â said Katherine Judge, an economist at Canadian Imperial Bank of Commerce. Officials will analyze two monthly jobs data, inflation reading, April GDP, and an estimate for May output before its next meeting on July 12. - âThe onus is clearly on that data to soften broadly to preclude another rate hike, and timing a slowdown has been challenging,â Royal Bank of Canada Senior Economist Josh Nye said in a report. Trades are now fully pricing in another 25 basis-point hike by the bankâs September meeting. The attention will shift to the Federal Reserveâs rate decision due next week. The sentiment is for Fed officials to go for a pause, but we will see new inflation data next Tuesday just before the central bankâs first day of meeting. OUR REVOLUTIONARY
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