Interest rates Financial News

Two premiers have sent letters to Bank of Canada governor Tiff Macklem urging the central bank to halt interest rate hikes ahead of its next rate decision Wednesday.

Doug Ford has become the second Canadian premier to formally express his displeasure with interest rate hikes, calling on the Bank of Canada to end the increases, which he says are “hurting people.”

Statistics Canada said Friday.The economy contracted 0.2 per cent annually in the quarter, the agency said, which was enough for some economists to believe the Bank of Canada would keep its key interest rate on hold at its next decision Sept. 6.StatCan also revised down its earlier GDP figures for the first quarter to 2.6 per cent growth, down from 3.1 per cent.The pullback in the second quarter came as housing investment fell 2.1 per cent to post its fifth consecutive quarterly decrease.New construction dropped 8.2 per cent in the quarter, while renovation spending also fell 4.3 per cent.While Canadians spent more overall in the quarter, StatCan noted that on a per-capita basis, spending was down 0.7 per cent in Q2.An early estimate by the agency had estimated Q2 growth at an annualized rate of one per cent.

As rising interest rates are boxing many individual buyers out of Canada’s housing market, brokerage Royal LePage says in a new report that Canadians are increasingly teaming up with family and friends just to afford a home.

‘The key element is that we on the MPC need to see the job through and ensure a lasting and sustainable return of inflation to the 2% target,’ Pill said. Credit: Bank of England

The upcoming $1.9 billion Bitcoin (BTC) monthly options expiry on Aug. 25 is key to defining whether the $26,000 support level will hold. One could pin the recent cryptocurrency market sell-off to the U.S. Securities Exchange Commission decision to delay the spot Bitcoin exchange-traded funds (ETF), but there’s also the macroeconomic perspective.

The cryptocurrency market has experienced a notable downturn recently, with the total market capitalization falling by 10% between Aug. 14 and Aug. 23, reaching its lowest point in over two months at $1.04 trillion. This movement has triggered significant liquidations on futures contracts, the most since the FTX collapse in November 2022. 

The share of non-financial UK companies under this stress — those with a low ratio of earnings to interest expenses — will rise from 45% in 2022 to 50% by the end of this year, the BoE said.

AXA IM, which had 2600 employees in total at the end of 2022, said the job cuts were “conditional” and it was currently in discussion with unions in France and Germany.

That lull snapped Thursday, when Bitcoin plunged more than 8% in the space of a few hours to a two-month low of $25,314 late in the New York day. The slump sparked a broad decline across all of crypto, leading to more than $1 billion in liquidations and putting Bitcoin on pace for its worst week since November and crypto exchange FTX’s collapse. The carnage — fueled by the prospect of prolonged high interest rates and exacerbated by thin crypto trading — was a reminder of the various threats that continue to stalk digital assets, from hostile regulators to a broader rout in risk assets. And even as Bitcoin has recovered smartly from last year’s lows, many investors are still sitting out, depriving the market of the breadth and depth that are key ingredients for a sustained bull run. “There are still significant amounts of macro uncertainty keeping investors away, and liquidity is still thin,” said Noelle Acheson, author of the “Crypto Is Macro Now” newsletter and former head of market insights at Genesis Trading. “Bottom line, there’s not yet enough conviction.”

On August 16, Bitcoin (BTC) closed below $29,000 for the first time in 56 days. Analysts quickly pointed to this week’s FOMC minutes, which expressed concerns about inflation and the need to increase interest rates, as the likely cause.

After hiking interest rates to their highest in 22 years last month, the central bank’s Federal Open Market Committee minutes revealed cracks in the consensus among members.

Total sales for the May 2023 through July 2023 period were up 2.3% from the same time a year ago.

Duncan MacIness (pictured) co-manages the Ruffer Investment Company alongside Jasmine Yeo.

Huw Pill (pictured) is chief economist at the Bank of England Credit: Bank of England

The Bank of England

In the latest episode of “The Market Report,” analyst and writer Marcel Pechman discusses the BALD token rug pull and the allegations pointing toward FTX founder Sam “SBF’ Bankman-Fried as the culprit. The token launched on Coinbase’s Base network, which is currently under development, and witnessed incredible gains between July 30 and 31.

'In order to encourage the formation of a yield curve, the bank will continue with large-scale Japanese government bond purchases.'

Over the last 12 months, market analysts and commentators have relentlessly predicted that the United States is heading for a recession. However, the U.S. economy has been remarkably resilient and defied the forecasts. Indeed, we now have the U.S. Federal Reserve discounting a recession from its current modeling, as Fed Chair Jerome Powell emphasized at the Fed’s July press conference. 

Eurozone inflation sat at 5.5% in June, down from 6.1% the month before but still substantially above the ECB’s target of 2%.

Federal Reserve chair Jerome Powell hinted at further rises, adding that there was a “long way to go” before inflation might be completely vanquished.