Nasdaq hits record high, CAD jumps

An investment in knowledge pays the best interest. – Benjamin Franklin

 

 

HEADLINES

 

 

 

• U.S. dollar index falls as currency volatility picks up
• USD/CAD tumbles toward 1.2300 after BoC decision
• Gold gains footing as U.S. bond yields, dollar slip
• Oil prices decline as EIA reports a weekly rise in U.S. crude supplies, but stocks at a key delivery hub drop
• Nasdaq Hits Record Highs as Tech Reigns Supreme on Falling Bond Yields
• BoJ Preview: Forecast by MUFG

 

 

FOREX

 

 

U.S. dollar index falls as currency volatility picks up

 

The U.S. dollar lost value against major currencies on Wednesday as the Bank of Canada started off a series of awaited central bank policy comments that could bring more volatility to what had been a relatively steady market.

Currency markets had moved little in the first two days of this week as traders paused for monetary policy announcements from major central banks around the world, including the U.S. Federal Reserve, which meets next week.

 

USD/CAD tumbles toward 1.2300 after BoC decision

 

The USD/CAD dropped sharply following the announcement of the Bank of Canada (BoC) to end QE. The loonie soared across the board becoming the best performer. Versus the dollar is climbed to the highest in three days.

BoC’s decision to keep interest rates unchanged as expected. Market consensus was looking at a reduction in QE to around CAD1 billion per week from 2B, instead, the central bank decided to end purchases

 

 

COMMODITIES

 

 

Gold gains footing as U.S. bond yields, dollar slip

 

Gold prices edged higher in seesaw trading on Wednesday, buoyed by a fall in U.S. bond yields and a softer dollar, although strong risk appetite in equity markets kept bullion’s gains in check. Helping gold, the dollar index dipped 0.2% against its rivals. Benchmark 10-year U.S. Treasury yields slipped below 1.6% to a near two-week low, decreasing the opportunity cost of holding non-yielding bullion.

 

Oil prices decline as EIA reports a weekly rise in U.S. crude supplies, but stocks at a key delivery hub drop

 

Oil futures declined on Wednesday, with U.S. prices pulling back from a seven-year high after U.S. government data showed a rise in domestic crude inventories, along with a drop in stockpiles at a key crude delivery hub.

 

 

STOCKS

 

 

Nasdaq Hits Record Highs as Tech Reigns Supreme on Falling Bond Yields

 

The S&P 500 edged higher Wednesday, as a jump in tech on falling U.S. bond yields and better-than-expected earnings from Microsoft and Google's Alphabet offset weakness in energy.

Alphabet (GOOG)’s third-quarter earnings beat was driven by strong performance in its digital advertising search business, which was less vulnerable to Apple (AAPL)’s privacy changes. Its share price was up 6%.

Microsoft (MSFT) delivered fourth-quarter guidance that topped expectations as its cloud business Azure continued to impress, growing more than 50% in the third quarter. Its shares were up about 4%.

 

 

ANALYSIS

 

 

BoJ Preview: Forecast by MUFG

 

“We expect the BoJ to keep monetary policy unchanged, with the policy rate at -0.1% and the target level for the 10Yr JGB yield at around zero percent, with a range of 25bps.” We expect the Monetary Policy Board to split its time addressing: 1) the Outlook Report: corporate and household sector conditions amidst rising prices resulting from a weakening JPY and resource prices climb; and 2) a checkup of the financial system, especially restructuring of the regional banking sector.”

 

 

CHART

 

 

British pound / New Zealand dollar – Daily Candlesticks

Source: GKFX Prime Metatrader 4

GBP/NZD has broken below support to reach its lowest since March. The breakdown looks set to extend the trend reversal that began after a rising trend line was broken. - Prepared by Trading Writers*

 

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

 

SOURCE

 

 

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/usd-cad-to-climb-towards-128-if-boc-reaffirms-the-output-gap-will-close-by-late-2022-scotiabank-202110271319
https://www.investing.com/news/stock-market-news/nasdaq-hits-record-highs-as-tech-reigns-supreme-on-falling-bond-yields-2657786
https://finnews.org/2021/10/27/nasdaq-hits-record-highs-as-tech-reigns-supreme-on-falling-bond-yields/
https://www.reuters.com/business/us-dollar-index-falls-currency-volatility-picks-up-2021-10-27/