|Bank of Canada Announcement|
As expected the BoC left key interest rates on hold at today's policy setting meeting. The target overnight rate thus remains at 1.0 percent while the Bank Rate stays at 1.25 percent and the deposit Rate at 0.75 percent.
However, the central bank has clearly become much more cautious about the economic outlook, especially prospective developments overseas. In particular, the Eurozone is seen as a major risk to growth. The U.S. market is anticipated to be soft over the first half of next year while a construction-led rebound in Japan is seen constrained by the impact of a strong yen.
Activity rates in the Canadian economy are seen supported by relatively robust domestic demand as net exports continue to suffer in the wake of an uncompetitive C$. Real GDP growth is now put at 2.1 percent this year before slowing to 1.9 percent in 2012 and then rebounding to 2.9 percent in 2013.
The softer GDP profile means that excess capacity is more than previously expected and a return to full capacity is not anticipated before the end of 2013. As a direct consequence, the underlying inflation forecast has been revised down and now shows the annual core CPI rate declining through 2012 before returning to 2 percent by the end of 2013.
More complete details of the new economic projections will be released in the Monetary Policy Report tomorrow but today's announcement is likely to be viewed as supportive of a possible interest rate cut at some point.
The central bank of Canada periodically announces its monetary policy with regard to interest rates. The announcement conveys to the financial markets and investors if and what change in policy might be. Why Investors Care
Of particular interest are Gold, Oil, Copper and the Commodities ETF, DBC...
The Daily chart below of Gold shows price bouncing in between several Fibonacci confluence levels of 1590, 1660 and 1700...a break and hold below 1590 could confirm the resumption of a bear market move in equities.
The Daily chart below of Oil shows price re-testing the falling 200 sma (pink) today...it could be forming the right shoulder of a very large H&S pattern that began in mid-2009 at around 95.00...a drop and hold below 80.00 could tie in with a bearish scenario in Gold and equities.
The Daily chart below of Copper shows that price re-tested a resistance level of 3.53 overnight...I'd be looking for a drop and hold below 3.15 to confirm the bearish scenario above.
Each candle on the chart below of the Commodities ETF, DBC represents 3 days...the current candle began yesterday...price is re-testing resistance confluence of the 100 sma (yellow) and price at 28.00...a break and hold below 25.50 would also tie in with the resumption of a bear move in Gold, Oil, Copper and equities.
Welcome and thank you for visiting!
The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.
DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...
UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Wed. April 18 @ 2:00 pm ET ~ Beige Book Report
* Wed. May 2 @ 2:00 pm ET ~ FOMC Announcement
* Fri. May 4 @ 8:30 am ET ~ Employment Data
* Thurs. May 10 @ 8:30 am ET ~ MoM & YoY CPI & Core CPI Data
* Wed. May 23 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Mon. May 28 ~ U.S. markets closed for Memorial Day Holiday
* Wed. June 13 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts + @ 2:30 pm ET ~ Fed Chair Press Conference
*** Click here for link to Economic Calendars for all upcoming events
IMPORTANT BLOG POST UPDATES...
Tuesday, October 25, 2011
Shiny & Slick...for how long?
Further to my post last night, I will be watching commodities closely on a longer term basis over the next days/weeks in light of the Bank of Canada Announcement today: