Market Information Thursday 27 October 2022

The Bank of Canada announced a smaller-than-expected interest rate hike on Wednesday and said it was getting closer to the point where rate hikes could end, as it forecast the economy could possibly slip into a slight recession. The central bank increased its policy rate by half a percentage point to 3.75%, coming up short on calls for another 75 basis points move. It has lifted rates by 350 basis points since March, one of its fastest tightening cycles ever.

Emerging market investors who avoided Chinese shares this year have seen less pain than those with portfolios exposed to the gamut of EM stocks, a trend exacerbated by this week’s selloff. The iShares Emerging Markets excluding China ETF has fallen by 25% so far this year, its worst performance since its inception in 2017.

British government bond yields rose on Wednesday as finance minister Jeremy Hunt pushed back his upcoming fiscal statement into November, a complication for investors and the Bank of England as they try to determine the inflation outlook. The fiscal update had been due on Monday but in a televised announcement, Hunt pushed it back to Nov. 17 – meaning the BoE will not be able to incorporate it into its economic forecasts, due to be published on Nov. 3 alongside its interest rate decision.

The 6M Euribor decreased with 2 basis points to 2.11% compared to previous business day. The 10Y Swap decreased with 3 basis points to 2.98% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.