The Bank of Canada will continue hiking interest rates as the resolution of trade uncertainties removed major risks to the economy. Economists predicted that Governor Poloz will boost rates by a quarter percentage point to 1.75% this morning. It is the fifth increase since the central bank began raising rates last year. The decision will be accompanied by new forecasts that will show a refined outlook for the Canadian economy.
The consequences from the killing of journalist Jamal Khashoggi in the Saudi Arabian Consulate in Istanbul has placed the Trump Administration in a difficult position between two regional allies. President Trump has stated that he will leave the response to Congress.
Oil continues to tumble on global markets. West Texas Intermediate was trading at $66.38 early this morning, almost 14% below the high reached earlier this month. The risk averse mood has been bolstered by Saudi Energy Minister Khalid Al-Falih stating that OPEC and its allies are prepared to increase output as much as possible.
Markets were left surprised by European PMI data as escalating concerns regarding global trade mount. The composite euro area PMI from IHS Markit dropped to 52.7 in October. Confidence among the country’s manufacturers dropped to the weakest level since 2016. Markit PMI data for the US is due later today.