Canada’s CPI (inflation) data rose across all metrics yesterday, suggesting that inflation in the advanced economy is proving to be a bit sticky as it approaches the target range.
- Canada’s consumer price index data released yesterday showed that inflation rose unexpectedly, but not by much. Monthly inflation rose from -0.4% to 0.4%, which led to an increase in the average consumer price index on an annual basis from 2.3% to 2.5%, when a rate of 2.4% was expected. This has helped boost the Canadian dollar over the past few hours, notably threatening to break a long-term high against a weak Japanese yen in the CAD/JPY currency cross.
- The cryptocurrency Bitcoin has been consolidating since making a new record high above $93,000 yesterday, and the current price indicates that a further bullish breakout is very likely to happen at any moment. The obvious target is the big round number of $100,000. Trend and momentum traders will be interested in going long in Bitcoin, which can be traded as spot Bitcoin, as CFDs, as futures (there is a micro future on CME that is only 10% of a coin in size) or as options.
- Equity markets are broadly up strongly, with several major indexes gaining strength over the past day, notably the NASDAQ 100 and S&P 500.
- In the forex market, the US dollar continues to lose ground after hitting a new one-year high last week. Like bitcoin, the dollar was also boosted by Trump’s victory, but there is a growing sense that this rally may have run dry. Riskier assets are recovering. As of today’s opening in Tokyo, the British pound was the strongest major currency, while the Japanese yen was the weakest.
- UK CPI (inflation) data will be released today, which is expected to show an increase in the annual rate from 1.7% to 2.2%. A significant variation from that is likely to cause volatility in the British pound.
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