Forex news for North American trading on April 21, 2021.
- US stocks and close near session highs. Snap 2-day losing streak
- WTI crude oil futures settle at $61.35
- Four takeaways from the Bank of Canada decision
- Yellen: We're taking a 'whole of economy approach' to climate change
- U.S. Treasury auctions off 20 year bond at a high yield of 2.144%
- European indices retrace some of yesterday's sharp declines
- Macklem Q&A: Potential output is still one percentage point below the pandemic
- Macklem opening statement: BOC more confident in underlying economic strength
- Crude oil inventories 0.594M versus -2.975M estimate
- How domestic and global GDP forecasts from the Bank of Canada changed to show much better growth
- Bank of Canada now sees inflation at target and output gap closing in 2022. Canadian dollar jumps
- Full text of Bank of Canada interest rate decision for April 2021
- Canada March CPI +2.2% y/y vs +2.3% expected
- The NZD is the strongest and the EUR is the weakest as NA traders enter for the day
The Bank of Canada left rates unchanged but did bring the weekly bond buying in by C$1B to C$3B starting next week.
- The Bank now forecasts real GDP growth of 6 ½ percent in 2021, moderating to around 3 ¾ percent in 2022 and 3 ¼ percent in 2023.
- Over the next few months, inflation is expected to rise temporarily to around the top of the 1-3 percent inflation-control range. This is largely the result of base-year effects-year-over-year CPI inflation is higher because prices of some goods and services fell sharply at the start of the pandemic
- The Bank expects CPI inflation to ease back toward 2 percent over the second half of 2021 as these base-year effects diminish, and inflation is expected to ease further because of the ongoing drag from excess capacity
- The BOC remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. Based on the Bank's latest projection, this is now expected to happen some time in the second half of 2022. It was 2023 previously.
The policy changes helped to push the CAD higher. That currency was the strongest of the majors. The weakest currency was the CHF and GBP. The USD is ending the day near unchanged vs the EUR, GBP, JPY and CHF (all within 0.10% of the close from yesterday), but fell by -0.89% vs the CAD, -0.47% vs the NZD and -0.35% vs the AUD. The CAD was the strongest vs the CHF at 0.99%, but also increased by 0.86% to 0.97% vs the USD, EUR, GBP, JPY.
In other markets today, the US stocks rebounded after a two day slide. The gains are led by the small-cap Russell 2000 which gained close to 2.3%. The NASDAQ index increased by near 1.2%. IN Europe, the major indices also increased, and retraced part of the declines from yesterday.
In the US debt market today, the treasury successfully auctioned off $24 billion of 20 year bonds and 2.144%. That was 0.9% below the Wi level at the time of the auction. Bid to cover ratio was better than the six month average. The dealers were not saddled with a large supply indicative of strong external demand.
Looking at the yields, the tenure yield is trading down -0.5 basis points and the 30 year is down -0.2 basis points.
In other markets:
- Spot gold rose by $15.55 or 0.88% $1794.27
- it's alter ego bitcoin was under pressure today. It fell by around $1800 or -3.17% to $55,020.
- WTI crude oil futures fell $1.60 to $61.07
