On Wednesday, the Bank of Canada is widely expected to raise rates again before signalling an end to its yearlong hiking campaign.  

Most analysts said the bank will announce a 25-basis point increase to its overnight rate, elevating it to 4.5%, the highest level in over a decade. There are outlying bets that the bank will keep rates at current levels.   

Economists at TD Securities wrote, “The December announcement strongly implied that we were close to the end of the tightening cycle. Specifically, the statement said that the ‘Governing Council will be considering whether the policy interest rate needs to rise further’ (emphasis ours), whereas previous communiqués declared that the Council expects that rates ‘will need to rise further’.” 

(Continue Reading - LiveSquawk)

German managers again expressed optimism about the coming six months but said the present situation has worsened just a week ahead of a likely 50-basis point interest rate hike by the European Central Bank.

The headline business climate index for Germany compiled by the country’s Ifo economics institute advanced to 90.2 points – its fourth straight increase – which beat the 88.6 mark from December but fell short of the market estimate of 90.3.

“The German economy is starting the new year with more confidence,” Ifo said.

Reuters reported that an economist from the institute said the German economy is unlikely to enter recession even if it shrinks in the current quarter. Earlier this month, the German government reported that the economy stagnated in the fourth quarter of 2022.

(Continue Reading - LiveSquawk)

Money-market wagers show a quarter-point rate cut is fully priced in by year-end, after a string of economic data pointed to growth stalling and inflation easing.

Figures Wednesday revealed UK factory price inflation rose at the slowest pace in almost a year, following separate releases Tuesday that signaled weak services industry sentiment and factories curtailing production at record rates.

Read more: UK Recession Risks Grow With Record Deficit and Output Slump

Market pricing still implies a half-point hike from the BOE next month, with its rate peaking around 4.5% in the summer. Yet the bets on cuts in 2023, made for the first time since August, show some doubt that the UK central bank will be able to keep rates that lofty for long.

(Continue Reading - Yahoo Finance)

Japan cut its view on the overall economy for the first time in 11 months in January, as China's COVID-19 infections and a slowdown in global demand for tech and semiconductors hurt exports, especially to Asia.

The government expects the economy, the world's third largest, will pick up going forward but Japan needs to pay full attention to the impact from China's spreading infections after it dropped stringent pandemic curbs, the report said.

(Continue Reading - Reuters)