The unorthodox specificity found in the International Monetary Fund’s latest forecasts for the US economy reintroduces a level of confusion and uncertainty for investors surrounding when the Federal Reserve will raise interest rates.
The best comment between the statuses of either the US or the Canadian economy comes from a Bank of Montreal Economist, Jenifer Lee. In referring to US economic growth in the first quarter she writes “the good news is its history.”
Markets have entered a state of flux. Without a doubt, one of the clearest trends in recent times has been the breakdown of the commodities super-cycle and a surging US dollar, a trend that now seems to be reversing.
The chief executive of the world’s largest asset management corporation made comments this week that suggested gold was passé.
The US dollar index has fallen around 3 per cent since its high the beginning of March. This past week saw the best weekly performance for the Canadian dollar in the last four years.
Financial markets have been going through another wave of directionless movements as they obsess over the “will they or wont they” question as to when the US Federal Reserve will begin to raise interest rates.
As the euro makes its way towards parity, we are witnessing the sole desired outcome of the policy initiative of the European Central Bank and their member governments.
Greece can declare a small victory. As Prime Minister Alexis Tsipras stated Friday evening, “a battle has been won, but not the war.”
There was certainly no shortage of action in the markets this week. Following a week when the Swiss France made a 30 per cent move in a matter of seconds, it would have been hard to believe we could match the week prior in terms of volatility and excitement.
The Swiss National Bank (SNB) shocked currency markets Thursday of this week with a policy decision that crippled the Euro-Franc cross. Their announcement sent the franc soaring 30 per cent against the euro.
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