Currency markets calmed on Monday in Asia after the initial shock of the discovery of the Omicron coronavirus variant sent investors scurrying for cover last week, but analysts warned of more volatility with little still known about the new strain.
Tech shares slipped and short-term Treasury yields jumped on Wednesday as investors expect inflation to prompt interest rate hikes, with a hotter-than-forecast reading in Australia the latest sign of prices pressuring central bankers to act.
Canadian municipalities reeling from a pandemic-driven hit to revenues are facing an added blow from surging liability insurance costs, forcing them to raise property taxes or even cut services for residents.
The New Zealand dollar rose on Tuesday after a strong business survey pulled forward rate hike expectations there to as soon November, while its Australian counterpart crept higher ahead of its own crucial central bank policy meeting later in the day.
After the unprecedented pandemic-driven swings in global financial markets last year 2021 was never going to be dull, and so it has proved.
The U.S. dollar remained on the back foot against major peers on Wednesday after a two-day drop as U.S. Federal Reserve officials including Chair Jerome Powell reaffirmed that tighter monetary policy was still some way off.
With fiscal spending booming and households flush with cash, investors are betting that the Bank of Canada’s next tightening cycle, expected to begin in 2022, will result in interest rates climbing above the previous peak for the first time in decades.
Canada’s financial regulator raised the amount of capital the country’s biggest lenders must hold to guard against risks to a record 2.5% of risk-weighted assets, from 1% currently, in a surprise move that could pave the way for them to resume dividend increases and share buybacks.