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The Powell Put | Canadian GDP Data
Published January 31, 2019
Federal Reserve Chair Powell indicated the bank has completed this round of interest rate hikes as US equities continue the most substantial January rally in decades. This sentiment spilled over into European markets this morning as major European indices prepare for the most considerable monthly gain in years. Interest rate futures are indicating low probabilities of future hikes being priced in for 2019.
The USDCAD pair is currently trading near three-month lows at 1.3130, as markets are eyeing an imminent breach of the 200-day moving average. The pair extended declines with selling pressure continuing amid broader weakness in the greenback from a very dovish Federal Reserve policy decision.
The release of Canadian GDP figures is set to be published this morning, with market participants expecting slightly weaker readings. Forecasts specify that the Canadian economy contracted by 0.1% during the reported month in contrast with a solid 0.3% growth recorded in the previous month.
President Trump will meet China’s Vice Premier Liu He today as the high-level trade negotiations come to an end will little signs that China will bend to American demands. Markets will look to concluding statements by the White House for progress on core subjects such as intellectual property rights.