Equities are trading barely lower, equity markets initially were higher this morning however investors have started leave Big Tech stocks. Today’s U.S. CPI came in as expected, leaving the U.S. Federal Reserve on the sidelines in terms of any interest rate movement. However, that being said, basic commodities such as copper are trading at recent highs, it’s up over 45% from its pre-Covid levels, wheat is 12% higher and so on. When will these price movements hit manufacturing and cost of living costs? It can’t be that far away.
The CAD is stronger to the USD on continued overall USD weakness, the CPI data shows an anemic economic recovery. Adding to Cad’s strength, oil rose, extending its rally for a ninth day, its longest winning streak in two years, supported by producer supply cuts and hopes vaccine rollouts will drive a recovery in demand. Getting mixed signals here.
A top Bank of Canada official called the recent spike in cryptocurrency prices “speculative mania,” and said such assets don’t have the qualities to become the money of the future. In a speech on “payments innovation,” Deputy Governor Tim Lane said costly verification methods and unstable purchasing power makes cryptocurrencies like Bitcoin a “flawed” method of payment. For several years, the Bank of Canada has been analyzing which circumstances might lead Canada to decide to issue a digital currency as a sort of contingency should the need arise. In his speech, Lane said the shift to online activities caused by the pandemic is forcing the central bank to accelerate those efforts. n order to advance its work on a digital currency, the bank has engaged with three university project teams independently. The reports from the research will be released Thursday and will help inform the bank’s thinking, Lane said.