BoC rate decision and Meta reports earnings
USD/CAD => The index pair falls to 1.36
BTC/USD => The crypto rises over 20k
Meta => The stock trades down 61% this year
BoC rate decision
The BoC is due to meet to discuss monetary policy and is expected to announce a fifth straight outsized rate hike. The move comes amid signs that inflation could be starting to slow and that the rate increases could be starting to slow the economy toward a recession. Markets are pricing in a 75 basis point hike, which would take the benchmark rate to 4%, which was last seen in 2008. While BoC Governor Tiff Macklem has been clear that more rate hikes are needed to tame inflation, there are limits on how high rates can go, given homeowners’ high levels of indebtedness. Could Macklem hint towards the pace of hikes slowing or the cycle ending? There is also growing speculation that Fed Chair Jerome Powell will also look to slow the pace of hikes after the November meeting.
Where might the USD/CAD price head to?
USD/CAD was trading within an ascending channel since April. The pair broke out of the channel in mid-September, running into resistance at 1.3970, the 2022 high. The price has since fallen back through the 20 sma. Support could be seen at 1.3510, the upper band of the rising channel, and the October low. A break below here potentially exposes the 50 sma at 1.3385. On the flip side, buyers could look for a rise over the 20 sma at 1.3715, bringing 1.3850, the September high, into focus. Beyond here, buyers might look for a move towards 1.3070?
BTC/USD rises as dovish pivot bets rise
BTC/USD surges over 20k, and ETH/USD rises above 1500, up nearly 5% and 11% over the past 24 hours, respectively, indicating that volatility has returned to the crypto markets. ETH/USD trades at its highest level since the Merge last month. The cryptocurrencies tracked US equities higher; the Nasdaq has rallied over 5% across the past three sessions as investors continue to digest the latest Q3 earnings and as a string of disappointing data fuels speculation that the Federal Reserve will look to slow the pace of rate hikes after the November meeting. While the market has fully priced in a 75 basis point hike in November, the probability of a 50 basis point hike in December is now greater than a 75 basis point hike, according to the market.
| US consumer confidence | Actual: 102.5 (1.5) | Previous: 107.8 |
Meta Q3 earnings preview
Meta is due to report after the close today. Wall Street expected Meta to report EPS of $1.89 on revenue of $27.41 billion. This is down from EPPS of $3.22 on revenue of $29.01 billion in the same quarter a year ago. Earnings come as the share price trades 61% lower across the year so far, underperforming the S&P500 and the Nasdaq, suggesting that the market no longer has confidence in the social media firm’s abilities. Slowing user growth and advertising revenue growth at Facebook and Instagram have unnerved investors. Still, expectations are low, which according to Citigroup analysts Meta could beat. Investors will want the Reality Labs to show improvements.
Support can be found at 122.50 (2022 low) and 110 (November 2016 low).
Resistance for the pair can be seen at 148 (50 sma) and 155 (August low).
