BoC to reduce bond purchases from $4 billion per week to $3 billion – TD Securities

Eren Sengezer FXStreet

Previewing the Bank of Canada's (BoC) policy meeting, TD Securities analysts said that they expect the bank to reduce its government of Canada (GoC) bond purchases from $4 billion per week to $3 billion per week, as reported by Reuters.

Key quotes

"In light of the much stronger than expected economic data over the last quarter, there is a risk of a more hawkish statement. We now look for the BoC to lift rates in October 2022."

"Taper and growth upgrades are expected, but a hawkish surprise in the form of an earlier output gap closure and hence earlier lift to rates could easily reignite CAD performance. Taken together with well-supported risk sentiment and a pivot in the Treasury market, we see greater scope for USDCAD to re-test its Covid cycle lows on a hawkish surprise. We also find appealing risk/reward to fade EURCAD rallies towards 1.50."

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD holds above 1.1750 after mixed EU PMI data

EUR/USD manages to hold above 1.1750 but struggles to gather recovery momentum on Friday, following the mixed February PMI figures from Germany and the Eurozone. In the second half of the day, Q4 GDP, December inflation and February PMI data from the US will be watched closely by market participants.

GBP/USD recovers further toward 1.3500 after UK PMI data

GBP/USD is recovering ground further toward 1.3500 in European trading on Friday, helped by a modest uptick in the Pound Sterling after stronger-than-expected UK January Retail Sales and February PMI data. However, the pair's further upside could be limited amid persistent US Dollar strength as the focus turns to key US data.

Gold sticks to positive bias above $5,000 ahead of US data

Gold gains some positive traction for the third consecutive day on Friday. holding above $5,000. Traders now look forward to the key US macro releases – the Advance Q4 GDP report and the Personal Consumption Expenditures (PCE) Price Index – for fresh trading impetus.

US GDP growth expected to slow down significantly in Q4 after stellar Q3

The United States Bureau of Economic Analysis will publish the first preliminary estimate of the fourth-quarter Gross Domestic Product at 13:30 GMT. Analysts forecast the US economy to have expanded at a 3% annualized rate, slowing down from the 4.4% growth posted in the previous quarter.

Iran tensions and AI fears at the forefront ahead of key US data

Thursday’s scorecard shows major US Stock benchmarks closed modestly in the red amid mounting US-Iran tensions and AI disruption worries. The S&P 500 shed 19 points (0.3%) to 6,861, the Nasdaq 100 lost 101 points (0.4%) to 24,797, and the Dow Jones Industrial Average dropped 267 points (0.5%) to 49,395.

Official Trump price approaches breakout with mixed signals from traders

Official Trump (TRUMP) is trading at $3.50 at the time of writing, approaching its upper consolidation range. A breakout from this range could open the door for an upside move. On-chain data shows market indecision, with balanced flows between bulls and bears, signaling a lack of clear directional bias.