More news from the Fed
Two regional Federal Reserve Presidents, John Williams of the San Francisco Fed and Patrick Harker of the Philadelphia Fed, stated yesterday that two or three interest rate hikes would be suitably in keeping with the strategy of gradually scaling back their dovish monetary policy. The bond market is now estimating that there is a 32% chance that the Fed will raise rates at its June 15 meeting, the highest level of expectation since March. The U.S. dollar has also taken advantage of these comments to gain ground against its peers. The U.S. Dollar Index (DXY), which measures the greenback against the main global currencies, has shot past its highs from April, posting daily gains in 12 of the last 16 trading sessions. The USD is certainly starting the week off on the right foot!
This morning, we’ll be keeping an eye on New Home Sales south of the border at 10 a.m. Markets expect a slight increase with 523,000 units sold in April compared to 511,000 in March. In Canada, most investor attention will be focused on the Bank of Canada’s key rate decision at 10 a.m. tomorrow. No change to the rate is expected as of yet. Meanwhile, the loonie is trading at its lowest level in the past two months this morning.
