Attention on Canada and the BOC's policy rates

Attention on Canada and the BOC's policy rates

09.06.2021

Yesterday, both European and U.S. markets saw mixed trading with little movement; the German DAX, which had been falling, continued its decline and closed at 15,640.WTI crude oil has broken through the key $70 per barrel level and is currently trading at $70.50. Expectations for a recovery in demand are rising as restrictions on economic activity are eased. Gold has pulled back slightly from its recent highs and has now fallen below the key $1,900 level, trading in the $1,894 range.

In the foreign exchange market, European currencies are showing strength, and the euro/dollar pair is rising. The euro/dollar is currently trading around 1.218. From a technical perspective, it appears to be finding support at the 20-day moving average on the daily chart, so it will be worth watching to see if it breaks through last month’s high. However, with the ECB’s interest rate announcement scheduled for tomorrow, it is important to keep in mind that the market may lack a clear direction today.

Today’s schedule includes Germany’s trade balance and Japan’s machine tool orders at 3:00 PM, the U.S. MBA Mortgage Applications Index at 8:00 PM, the Bank of Canada’s policy rate and U.S. wholesale inventories (final reading) at 11:00 PM, U.S. weekly crude oil inventories at 11:30 PM, and the U.S. 10-year Treasury auction at 2:00 AM.While Canada’s policy rate is expected to remain at 0.25%, as in the previous meeting, attention will focus on what the central bank says regarding tapering and interest rate hikes during the press conference.