Forex Signals

Goldman Sachs change their growth forecast for US from 5%-6% in 2021 to 3,4% in 2022 because of two factors:

• spread of Omicron Variant
• diminishing expectations for fiscal stimulus

Deloitte projects 4% GDP instead of Reserve Bank of Australia 5,5% 

Deloitte Access Economics says the Omicron variant manes the RBA forecast is too optimistic because omicron is Spreading at a rapid rate and half the workforce would likely miss an extra week of work in H1 of 2022.

But with optimism Deloitte inform us that Omicron would not cause the same economic problems as the first two waves.

Will economy drop into 2022, what is your opinion?!

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“Based on rhetoric from the Bank of Canada in December, it was clear that labour market dynamics and outperforming economic data had created heightened concerns at the Bank that the output gap was closing more rapidly than expected,” wrote Silvana Dimino, a New York-based economist at J.P. Morgan, in a report to clients Tuesday

Dimino sees the Bank raising its benchmark rate by 25 basis points to 0.5 per cent in January; her team previously called for the first move in April. She expects there will be five rate hikes this year, which would push the benchmark rate to 1.5 per cent by year-end.

She also expects the Bank to begin a modest run off of its balance sheet in the second half of this year.

As of mid-day Wednesday, overnight index swaps pegged the probability of a January rate hike in Canada at 46 per cent.

In October, Bank of Canada Governor Tiff Macklem indicated he would not tighten policy until the economic recovery was complete – something he expected to happen in the “middle quarters” of this year. But data since then suggest the economy has been outperforming.

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• Prior was 6.2%
• m/m CPI +0.5% vs +0.4% expected
• Prior m/m reading was +0.8%
• Real weekly earnings +0.1% vs -0.2% prior (prior revised to -0.4%)

Core inflation:

• Ex food and energy +5.5% vs +5.4% y/y expected
• Prior ex food and energy +4.9%
• Core m/m +0.6% vs +0.5% exp
• Prior core m/m +0.5%

Some notable categories:

• New vehicles +1.0% m/m
• Used cars and trucks +3.5% m/m (and +37.3% y/y)
• Apparel +1.7%
• Shelter +0.4%
• Gasoline -0.5%
• Food +0.5%

Gold is UP 

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