Your morning bite. A smaller-than-expected BOC hike raises hopes for slower rate hikes globally. Meta's results stink.
Stocks:
Microsoft and Alphabet earnings weighed on Wall Street last night. Meta's earnings this morning is likely to extend that trend. lt posted weaker than expected results, with EPS coming in below the $1.86 estimate and at $1.64. Revenues declined, and revenue guidance was below expectations. The S&P500 fell 0.7% and the NASDAQ dropped 2.3% in cashtrade. SPI Futures are implying a 26 point lift for the ASX200 this morning. $S&P 500(.SPX)$ $NASDAQ(.IXIC)$ $S&P/ASX 200(XJO.AU)$
Rates/bonds:
The Bank of Canada hiked rates by less than expected. lt raised its policy rate by 50 basis points, below the 75 point forecast. The decision boosted hopes that other central banks - chiefly, the US Fed - will soon signal or do the same.The US 10 year yield dropped 9 points to 4.01%, The 10-2 spread is currently 41 basis points. Markets are still pricing in a 75 point hike from the Fed and terminal Fed Funds Rate of 5%. The terminal cash rate for the RBA has lifted to 4.2% after yesterday's CPl data. $Micro 10-Year Yield - main 2210(10Ymain)$ $Micro 2-Year Yield - main 2210(2YYmain)$
FX:
The move by the BOC sparked a bit of risk on FX markets.The Dollar Index plunged 1.13%, the Euro jumped above parity, the Pound is above 1.16, the Yen surged to 146. The Ausie Dollar lifted towards 65 cents, as markets lifted expectations for the RBA's cash rate.
Commodities:
Gold rose half a per cent to $US1665 as yields and the Dollar dropped. Oil jumped 3.3%, in part due to comments from Secretary of State Antony Blinken casting doubt over the lran nuclear deal. This came despite an unexpected 2.6m barrel build in US crudeinventories. $Gold - Dec 2022(GC2212)$
Crypto:
Bitcoin caught the risk on vibe, lifting above $20,700.
Here's your change in the cash rate futures curve since met at the start of the month. Market pricing is implying a ~4.2% terminal rate. $($aud )$
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