PREVIOUS TRADING DAY EVENTS 07 June 2023

Announcements   

The Bank of Canada has decided to hike its overnight rate to a 22year high of 4.75. The market was expecting no change. This surprising increase caused the CAD to appreciate greatly at that time and further turmoil in the market for USD and U.S. Stocks.

We have seen a lot of surprises lately. Another surprise took place just recently on the 6th of June with the RBA increasing the Cash rate to 4.10 against the expected unchanged 3.85. Markets and analysts immediately forecast that there is going to be another increase from the BOC next month as Central Banks do not hesitate to act aggressively against stubborn inflation.

Following an increase in inflation in April and the fact that threemonth measures of core inflation remained high, the Bank of Canada BoC said that concerns have increased that CPI inflation could get stuck materially above the 2 target.

monetary policy was not sufficiently restrictive to bring supply and demand back into balance and return inflation sustainably to the 2 target.

We expect another 25 basis points coming in July, said Derek Holt, vice president of capital markets economics at Scotiabank. It is like a bag of chips, you open one and just cant have one.

The Canadian economy has shown remarkable resilience through 2023, said Andrew Kelvin, chief Canada strategist at TD Securities, who also sees another hike in July. To bring demand lower, which is the banks goal to achieve their…