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Stocks and Euro look to rebound; CAD soars on hawkish hold

Summary:

  • Stocks look to recover from rout on Italian political turmoil
  • EURUSD showing possible reversal signs on supportive data points
  • CAD rallies strongly as BOC announce hawkish hold
  • SEK strengthens as wage growth shoots up
  • Oil.WTI technical overview

Stock indices have looked to recover today following Tuesday’s rout on the Italian political turmoil. The situation in Italy is clearly tense, but some positive noises today have seen some respite with talk that a coalition may still be formed. An in-depth look at this as well as the markets impacted can be found here.

There has also been a recovery in the EURUSD, with the rise in this pair also aided by some favourable data points as far as longs are concerned. Firstly, German inflation rose above 2%, which could ramp-up pressure on the ECB to remove stimulus whilst the USD has fallen back as ADP missed forecasts and US GDP was revised lower.  

 The latest rate decision from the Bank of Canada has caused a strong move higher in the Canadian dollar, despite keeping the rates unchanged. Market expectations for any movement on the overnight rate were low and as such, the decision to keep it at 1.25% will have caused little market reaction, with the move more likely due to the changes in the statement - which could be described as a hawkish hold and have paved the way for a July hike. 

The Swedish krona is dividing and conquering in the G10 basket strengthening against the US dollar as much as 1.7% after the sturdy wage growth data for March boosting odds for a rate hike this year. GDP growth for the first three months also surprised to the upside, but the first impression was watered down along with a downward revision for the last quarter of 2017.

Another market that has enjoyed a strong day’s gains is Oil.WTI and a technical overview can be found here

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