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Yields surge after surprise BOC hike & on reports Messi signs with Inter Miami

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Wall Street has been on a heightened watch to see if major central banks might be unleashing significantly more tightening and over who will sign Leonel Messi?  At the 10am hour in New York, we got answers to both questions.  The BBC reported that Lionel Messi has decided not to return to Barcelona and join Inter Miami.  Inter Miami has been struggling all season long and saw their odds go from 150/1 to 25/1 to win MLS Cup 2023.  If confirmed, this would be massive for consumer spending as MLS games involving will be sold out in addition to record breaking merchandise sales.

BOC resumes hiking as interest rate differential with the US narrows

The Bank of Canada is a leading central bank.  They were the first major central bank to raise rates in 2022 and they were the first ones this year to pause their tightening cycle.  The BOC restarted its tightening cycle and will likely be delivering more rate hikes given the recent trends with inflation, growth, and housing data.

The interest rate differential is steadily disappearing between the US and Canada.  Global bond yields are rising now that we’ve seen both Australia and Canada have to resume their respective rate hiking cycles.

The Canadian dollar is getting a boost from the BOC rate hike and as oil prices rebound.  Since October USD/CAD has been trading between 1.32 and 1.38, but that could change if the Canadian economy continues to outperform.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
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