May 21PragmaticodinForecasters expect this week's data to show a decline in Canada's CPI in April, but financial markets are still uncertain whether the Bank of Canada will cut interest rates in June. Douglas Porter, chief economist of Bank of Montreal (BMO), saidPragmaticodinHe expects Canada's annual inflation rate to slow to 2% in April.Pragmaticodin.8%, down slightly from 2% in MarchPragmaticodin.9%. He also expects the core inflation indicator, which excludes volatile prices, to fall slightly. But he said the Bank of Canada might need to see lower inflation before it could persuade it to cut interest rates in June. Economists have widely expected the central bank to start cutting policy rates in June or July, given that the Canadian economy is clearly slowing due to rising interest rates. But recent strong employment data have shifted expectations of a rate cut in June. This makes the upcoming inflation report particularly important for forecasters trying to consolidate interest rate forecasts. Expectations of a rate cut in Canada have also been tempered by the fact that it may take longer for the Fed to start cutting policy rates.
In addition, Bostick, chairman of the FOMC and chairman of the Atlanta Federal Reserve, took the lead in releasing the eagle, saying that US neutral interest rates may be higher than in the past decade. In an interview with the media on Monday, Bostick said: I do think the new "stable state" of US interest rates may be higher than people have known in the past decade, perhaps going back to the levels of the 1990s and 2000s. But we'll have to wait and see. The Atlanta Fed governor also reiterated that his forecast for the Fed's interest rate policy remained unchanged, meaning that with inflation slowing but bumpy, interest rates could be cut only once in 2024, which would take place in the October-December quarter. On the inflation front, Mr Bostick said: this year's data show that inflation will fall more slowly and it will take some time to confirm that it will fall back to 2 per cent. We still have a long way to go on inflation, but my basic expectation is that inflation will continue to fall this year and 2025, but at a slower rate than many expected.
The data to watch today are the euro zone's quarterly adjusted trade account in March, the UK's May CBI industrial order gap and Canada's unseasonally adjusted CPI annual rate in April.
Gold / US dollar
Gold rallied yesterday and then fell back, with intraday gains narrowing and is now trading around 2415. In addition to the Fed's remaining interest rate cut expectations that continue to support gold during the year, geopolitical tensions persist and rising risk aversion in the market is also an important factor supporting the rise in safe-haven commodity gold. However, a spate of hawkish comments by Fed officials to cool the Fed's expectations of interest rate cuts have limited the upside of gold. Today, we will focus on the pressure situation near 2430, with the lower support around 2400.
USD / JPY
The dollar / yen fluctuated upwards yesterday, closed slightly higher on the Japanese line, and is now trading around 156.30. The rise of the dollar index, supported by hawkish comments by Fed officials to cool the Fed's interest rate cut expectations and rising risk aversion in the market, is the main reason to support the higher exchange rate. However, fears of the BoJ's renewed intervention in the currency market have limited the room for appreciation. Today, we will focus on the pressure situation near 157.00, with the lower support around 155.50.
Us dollar / Canadian dollar
The dollar / Canadian dollar fluctuated and consolidated yesterday, the daily line closed slightly higher, and the exchange rate is now trading around 1.3640. In addition to the short covering and the technical buying formed near the 1.3600 mark, the rise of the dollar index under the support of multiple positive factors also constitutes a certain support to the exchange rate. In addition, the decline in the price of crude oil has also provided some support to the exchange rate. Today, we will focus on the pressure situation near 1.3750, with the lower support around 1.3550.
