The Bank of Canada hiked its benchmark policy rate by 50 basis points to 3.75%, less than the 75 basis point move expected by markets. Rates are up 350 basis points since March.
In US economic data, new home sales fell by 10.9% to a 603,000 annual rate in September (survey: 580,000). The goods trade deficit widened from US$87.3bn to US$92.2bn in September (survey: – US$87.5bn). Wholesale inventories lifted 0.8% in September (survey: +1.0%). MBA mortgage applications fell by 1.7% in the past week.
European sharemarkets rose on Wednesday, hitting five week highs, ahead of Thursday’s European Central Bank (ECB) meeting. Shares of Deutsche Bank lifted 1.2% after it posted a jump in third quarter profits. The continent-wide FTSEurofirst 300 index closed up by 0.5%. And the UK FTSE 100 index rose by 0.6% as Britain’s new prime minister, Rishi Sunak, delayed the announcement of his fiscal repair plans until November 17.
US sharemarkets were mixed on Wednesday on renewed bets of a slowdown in the pace of interest rate hikes, while the Nasdaq index came under pressure from downbeat earnings results. Shares of Microsoft slid 7.7% after posting its lowest sales growth in five years. Google parent Alphabet (-9.1%) reported downbeat ad sales. Shares of Boeing tumbled 8.8% after it reduced its annual forecast for deliveries of its 737 jets. But Visa shares jumped 4.6%, boosting the Dow Jones index, after payments topped quarterly profit estimates. The Dow rose by just 2 points or less than 0.1%. But the S&P 500 index slid 0.7% and the Nasdaq index shed 228 points or 2%.
US treasuries rose on Wednesday (yields lower) as trader expectations of slower rate hikes gained after the Bank of Canada delivered a smaller-than-expected 50 basis point rate hike. US 10- year yields fell around 10 points to near 4.01%. And US 2-year yields dipped by around 4 points to near 4.43%.
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Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$0.9950 to highs near US$1.0088 and was near US$1.0080 at the US close. The Aussie dollar rose from lows near US63.96 cents to highs near US65.09 cents and was near US64.90 cents at the US close. The Japanese yen firmed from 148.27 yen per US dollar to JPY146.22 and was near JPY146.35 at the US close.
Global oil prices rose as much as 3% on Wednesday after the US exported a record amount of crude and fuel last week. Crude exports rose to 5.1 million barrels a day. US crude stocks lifted by 2.588 million barrels last week, according to government data (survey: +1.029 million). The Brent crude oil price rose by US$2.17 or 2.3% to US$95.69 a barrel. And the US Nymex crude oil price lifted by US$2.59 or 3.0% to US$87.91 a barrel.
Base metal prices advanced on Wednesday as hopes for a slower pace of US interest rate rises weakened the US dollar. Aluminium jumped 5.4% with copper up 3.3%.
The gold futures price rose by US$11.20 an ounce or 0.7% to US$1,669.20 an ounce. Spot gold was trading near US$1,664 an ounce at the US close. Iron ore futures fell by US$1.05 or 1.1% to US$93.56 a tonne.
Originally published by CommSec