- Bank of Canada overnight rate 4.75% vs 4.50% prior
- Full statement from the Bank of Canada June 2023 rate decision. Hike 25 basis points
- US April international trade balance -$74.6 billion versus -$75.2 billion estimate
- US April consumer credit outstanding +23B vs +22B expected
- April Canadian trade balance +1.94B vs +0.90B expected
- Canada Q1 labour productivity -0.6% vs -0.5% prior
- Atlanta Fed GDPNow revised to 2.2% from 2.0% last
- EIA weekly US oil inventories -451K vs +1022K expected
- ECB's Makhlouf: It would be a question of judgement on rate hikes beyond the summer
- Gold down $21 to $1941
- US 10-year yields up 9.3 bps to 3.79%
- WTI crude oil up 80-cents to 72.54
- S&P 500 down 13 points to 4276, or -0.4%
- Russell 2000 +2.0%, Nasdaq -1.3%
- CAD leads, NZD lags
It was a volatile one and there aren't many easy answers to explain the moves. Initially in North American trading, there was some swift US dollar selling in an almost-gappy fashion as USD/JPY dropped to 139.00 and cable jumped to 1.2500. Both those levels held but the turn in the dollar had to be far more than technicals because it was intense. USD/JPY ran in a straight line to 140.20 and cable fell to 1.2434.
The dollar buying was broad based and was partly boosted by a selloff in Treasury yields.
The Bank of Canada might have played into worries about further Fed hikes but the fed fund futures didn't move on the day from a 30% probability for June. For USD/CAD itself, the hike was a moderate surprise and sank the pair quickly to 1.3322 from 1.3400 but the selling was over quickly and the pair eventually made a full recovery, despite gains in oil and gas.
Dollar buying also weighed heavily on gold while the euro traded in an 80-pip range but ultimately finished flat on the day.
In equities, there were clear signs of rotation with tech slumping and value jumping.