On Wednesday, the Bank of Canada surprised markets by raising its key rate by 25 basis points to 4.75%, citing persistent excess demand and increasing concerns that inflation could \u201cget stuck\u201d materially above the target. This decision follows the Reserve Bank of Australia\u2019s hike on Tuesday, which also exceeded economic consensus. The upcoming week will see monetary policy meetings from the Federal Reserve, the European Central Bank, and the Bank of Japan.
In terms of data for Thursday\u2019s Asian session, Japan\u2019s Q1 GDP will be released along with New Zealand\u2019s Q1 Manufacturing Sales and Australia\u2019s trade data. Later in the day, the Eurozone\u2019s GDP and employment figures will be released along with the weekly US Jobless Claims report.
The Fed remains in its blackout period, preventing markets from hearing any official comments. Recent data shows a weakening in the manufacturing sector, though there are no imminent signs of a recession. All eyes are now on the upcoming Consumer Price Index (CPI) report next Tuesday, which is expected to be a key determinant for the Fed\u2019s decision.
According to analysts at Wells Fargo, they still expect the delayed effects of monetary tightening and tighter credit availability to dampen economic growth. However, the enduring strength of the labor market prompted upward adjustments to their forecast for employment, real disposable income and consumption, shifting the expected start of the downturn closer to the end of this year.<\/p>\n\n\n\n
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