Capital Markets: "Bank of Canada may say Pause, but the Market Hears Finished"

From Marc Chandler at Bannockburn Global Forex:

Overview: Amid sharp losses in the US equity futures, the US dollar is mostly firmer against the G10 currencies. The notable exception is the Australian dollar, where high-than-expected inflation boosts the risk of a more aggressive central bank. The Aussie reached its best level since last August (~$0.7125). With a light US economic diary and Fed officials in the quiet period ahead of next week's FOMC meeting, the main focus in North America is on the Bank of Canada meeting. A quarter-point hike, after last month's 50 bp move is expected to end the cycle, but the central bank will want to keep its options open.

Asia Pacific equities mostly advanced, and the return of South Korea saw the Kospi jump 1.3%. Singapore markets also re-opened, and the Strait Times rose 1.8%. European equities are heavy, and the US futures are pointing to a sharply lower opening. Benchmark 10-year yields are mostly 2-6 bp lower in the Europe. The 10-year US Treasury yield is slightly lower near 3.43% after snapping a three-day increase yesterday that had taken the yield back above 3.50%. After API reported 3.3 mln barrel build on top of 7.6 mln barrels the previous week, March WTI is trading softer. If the losses are sustained, it would be the third consecutive decline and the longest such streak in more than a month. Meanwhile, gasoline prices have continued to drift higher.

Asia Pacific

A quickening of Australian inflation boosted lifted rate expectations and sent the Australian dollar sharply higher....

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