Year: 2025

  • Canadian inflation: Markets are getting ahead of themselves on rate hikes – CIBC

    If you’ve been watching the Canadian curve steepen with bets on Bank of Canada hikes, CIBC has a message for you: Not so fast.

    Following the November CPI release earlier today, CIBC’s Andrew Grantham is out with a note pouring cold water on the recent hawkish repricing in the market. While headline inflation held steady at 2.2%, Grantham argues the details don’t support the aggressive pricing for hikes we’ve seen creeping into the strip before the end of 2026.

    The “Push and Pull” keeps the Bank on hold

    Grantham describes the current environment as a “push and pull” dynamic. You have the “push” of stronger food and gasoline prices—grocery costs just saw their biggest monthly jump since March —being offset by the “pull” of softer core inflation.

    That leaves the Bank of Canada in a bind, but a stable one.

    Key takeaways from CIBC:

    • The Sweet Spot (sort of): Underlying inflation is sitting around 2.5%. That is still “too high” to justify any further interest rate cuts right now.

    • The Pushback: However, the data isn’t hot enough to validate the market’s recent pricing for rate hikes. Pricing is currently at 12% for a hike in September or sooner with one hike at 92% by year end.

    • Volatility Ahead: Don’t get chopped up by headline volatility in the coming months. Grantham warns that base effects from last year’s GST/HST holiday will make the headline numbers noisy, even as core measures (excluding tax changes) likely continue to ease.

    The bottom line from CIBC is that the Bank of Canada is locked into a “prolonged pause”. That’s likely to make the Fed side of the equation more meaningful for USD/CAD.

    They continue to forecast the overnight rate holding steady at the current 2.25% level throughout the entirety of next year. Bond yields and the Loonie drifted marginally lower on the print, suggesting traders are already starting to unwind some of those hike bets.

    This article was written by Adam Button at investinglive.com.

  • NZDUSD technical outlook: price stalls between key support and resistance

    The NZDUSD moved higher last week, and in the process extended above its 100-day moving average, signaling an improvement in the near-term technical picture. The upside push carried the pair toward the lower boundary of a key swing area between 0.5830 and 0.5844, an area that has acted as resistance in the past. Sellers leaned against that zone, limiting upside follow-through and forcing a pullback into the end of the week.

    Sellers defend resistance, buyers protect support

    As the week progressed, selling pressure pushed the pair back toward the 100-day moving average, which acted as a magnet for price action. In early trading today, the downside extended further, with NZDUSD sliding toward the upper boundary of a prior swing area between 0.5748 and 0.57609. The low reached 0.5765, just above that support zone, before buyers stepped in and sparked a rebound.

    Natural resistance caps the rebound near 0.5800

    The bounce off support has so far been contained by natural resistance near 0.5800, an area that also coincides closely with the 100-day moving average. That confluence has once again proven difficult to overcome, with price stalling near the level and reinforcing its importance as a short-term dividing line between bullish and bearish control.

    Short-term range battle mirrors AUDUSD

    Like AUDUSD, NZDUSD is currently caught between nearby support and resistance, with neither buyers nor sellers able to assert sustained control. Buyers continue to defend dips toward the mid-0.57 area, while sellers remain active on rallies toward the 0.5800–0.5840 region. The tightening range suggests the market is coiling, as traders wait for the next decisive push to set direction.

    Bottom line

    NZDUSD sits at a technical crossroads. Holding above the 0.5748–0.5761 support zone keeps buyers engaged, while a break back above the 100-day moving average and the 0.5830–0.5844 resistance area would tilt the bias more decisively higher. Until one of those levels gives way, range-bound trade and patience are likely to dominate the near-term outlook.

    Watch the Video Analysis

    In the video above, I (Greg Michalowski, author of Attacking Currency Trends) break down the technical factors driving this move in real-time. I outline exactly where the risk lies, how to interpret these moving average bounces, and map out the next targets that matter most for the NZD/USD currency pair.

    Be aware. Be prepared.

    This article was written by Greg Michalowski at investinglive.com.

  • More Fed’s Williams: Very supportive of US central bank’s decision to cut interest rates

    The New York Fed Pres. Williams is speaking and says:

    • Very supportive” of the U.S. central bank’s decision to cut interest rates last week

    • Expects coming job data will show gradual cooling

    • Too early to say what the Fed will need to do in January

    • Strong markets are part of the reason why the economy will grow robustly in 2026

    • Market valuations are elevated, but there are reasons for current pricing

    • What constitutes ample reserves will change over time

    • Some signs that parts of the underlying economy are not as strong as GDP data suggests

    • Ample reserves system is working very well

    • Financial system is basically at an ample-reserves level

    Overall policy takeaway:

    Bias is mildly dovish and balanced. Williams clearly supports the recent rate cut and points to gradual labor-market cooling and pockets of underlying economic softness.

    At the same time, his comments on strong markets and robust growth expectations for 2026 keep the message firmly data-dependent rather than strongly dovish.

    Earlier today, WIlliam’s said that policy is well positioned for what lies ahead, as risks to the labor market have risen while risks to inflation have eased. He characterized tariffs as a one-off price adjustment that should not spill over into broader inflation and said uncertainty around tariffs has declined notably. Williams expects inflation to ease to 2.5% in 2026 and reach 2% in 2027, while projecting GDP growth of about 2.25% in 2026, well above the pace expected for 2025.

    On the labor side, he sees gradual cooling, but also projects the unemployment rate will decline over the next few years, framing the Fed’s baseline outlook as “a pretty good outcome.” He noted that Fed policy has moved closer to neutral from a modestly restrictive stance, though inflation remains too high, suggesting no strong signal for imminent action even as markets price some chance of a January rate cut and multiple cuts in 2026.

    This article was written by Greg Michalowski at investinglive.com.

  • Fed’s Williams sees cooling jobs market, tariff risks contained

    New York Fed President John Williams said monetary policy is “well positioned” heading into 2026, as the Fed has moved from a modestly restrictive stance toward neutral. He emphasized the need to return inflation to the 2% target without creating “undue risks” to the labor market, framing current policy as appropriately balanced after recent cuts. […]

    The post Fed’s Williams sees cooling jobs market, tariff risks contained appeared first on ActionForex.

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