IAIC Market Update - October 31, 2022

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

• The major and local economic news last week centred around the Bank of Canada’s interest rate announcement on Wednesday. The BoC increased the key lending rate by ½ percent (50 basis points), which now stands at 3.75%. It had been 0.25% until increases began on March 2, 2022. 
• A heavy influence for the Bank of Canada occurred one week ago, when Canadian consumer inflation numbers were released on October 19th. Most analysts had predicted a larger increase even as inflation, the primary target of increased interest rates, has moderated slightly over the past three months. For September, the monthly inflation rose 0.1% while the year-over-year rate fell by 0.1% to 6.9%, down from 8.1% in June. (Source1, Source2) 
• On Friday StatsCan announced Gross Domestic Product (GDP) for August, which increased by 0.1% over July. Services industries recaptured some earlier momentum while the production of goods faltered. (Source) 
• In addition to the Bank of Canada’s rate increase, the European Central Bank (ECB) raised its benchmark rate by 75 basis points (¾ percent). (Source) 
  
  

What’s ahead for this week?

• In Canada, September’s imports, exports and trade balance and October’s employment report are the most important economic indicators scheduled for release. 
• In the U.S., the most significant news will occur on Wednesday afternoon when the Federal Reserve releases its latest monetary policy report and interest rate decision. October’s Non-farm payroll report will also carry significant influence over markets. Additionally, imports, exports and trade balance, and several Purchasing Managers Indexes will be released in a busy week for announcements
• Globally, the rounds of important announcements continue with the Eurozone’s Consumer Price Index, Producer Price Index, and Gross Domestic Product scheduled.