Weekly comment – ECB and BoC to go their separate ways

Optimism returned to stock markets as a stellar earnings season calmed nerves, pushing investors away from the safety of the USD. The upcoming week is huge, with three central bank meetings, the tech titans reporting earnings, and a ton of crucial economic data to keep things exciting. 

The highlights: 
  • The ECB meets on Thursday and could push back against market pricing for a rate increase next year, since the European economy is still grappling with stagflation risks. That could inflict some more damage on the EUR.  
  • The Bank of Canada might do exactly the opposite on Wednesday. The Canadian economy is so strong that it might signal rate increases will come faster and more powerfully, adding fuel to the CAD’s recent rally. 
  • In Japan, the central bank meets on Thursday but nothing is expected. The JPY is at the mercy of foreign central banks instead. More importantly, US GDP could disappoint on Friday, given what the Atlanta Fed GDPNow model suggests. 
  • Meanwhile in commodities, OIL prices keep pushing higher as the global energy crisis unfolds. GOLD is also showing some life, drawing power from rising inflation expectations. 
  • Finally, stock markets are partying amid a stellar earnings season so far. Next week will be huge in this sense, with Facebook, Apple, Microsoft, Amazon, AMD, and many others releasing their quarterly results. 

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.