European Open Markets on Inflationary Edge Ahead of Todays PPI
With markets likely suffering from confirmation bias after yesterday’s strong CPI print, we could see an extension of yesterday’s moves if PPI delivers and the Fed remain quiet.
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The Bank of Canada left rates unchanged today and said that rates would remain at the record low 0.25% until economic slack is absorbed, which they didn’t expect to be until 2023, at the earliest. The BOC also left their bond purchase program unchanged, buying up to 4 billion Canadian Dollars a week.
EUR/CAD has been in a downward sloping channel since July 31st, 2020 and broke lower out of the channel, and below the 50% retracement level from the February 2020 lows to the highs of March 19th, 2020 , on March 3rd.
Remember, the ECB meets later, and EUR/CAD is sitting at a key level. Because the Bank of Canada was “as expected” today, any changes to the European Central Banks current monetary stimulus program could cause this pair to move quickly.
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