All Eyes on Poloz and Bank of Canada Today; Oil Prices Fall, Slightly
Published January 17, 2018
All eyes today will be on the Bank of Canada’s interest rate announcement, Monetary Policy Report and the following press conference. The rate announcement and Monetary Policy Report come out at 10:00am EST; the press conference will follow, at 11:15am EST. Most are expecting the central bank to raise its benchmark rate by 25 basis points to 1.25% which would mark the third hike in the past six months, though everyone knows that Poloz can be somewhat unpredictable and has surprised markets in the past.
The greenback held onto modest gains against other majors today, just off a three-year low as the euro finally gave back some strength, although fresh political tensions in Washington were expected to limit gains. Comments made by Trump on immigration dampened the prospects that a broad spending and immigration deal can be reached by the week’s end, raising the possibility of a government shutdown.
In the US, market players will be keeping an eye on December industrial and manufacturing production and the publication of the Federal Reserve’s Beige Book that gives insight into the economic situation in the 12 federal districts. Several policymakers will be making appearances today and could give some hints on future moves in monetary policy.
Out of the European Union’s statistics office this morning, the Consumer Price Index rose at an annual rate of 1.4% in December, down 0.1% from November. The rates were in line with expectations but below the ECB target inflation rate of 2%, supporting the central bank’s approach to gradually increase interest rates.
Oil prices weakened following early gains today, but remained underpinned by tightening supply and strong global demand. Tighter fundamentals have lifted crude futures benchmarks about 13% above levels from early December, helped by dampened production by OPEC and Russia, as well as by healthy demand growth. Brent Crude is currently down ~0.38% on the day trading around 69.10 while WTI is down ~1.84% trading around 63.55, at time of writing.