1. Big Day for Central Banks
It’s the big day today…
Bank of Canada (BoC) cuts rates at 10:00 a.m., followed by a press conference at 10:30 a.m.
Then, the Federal Reserve cuts rates at 2:00 p.m., with a press conference at 2:30 p.m.
Look, there will be cuts by the BoC and the Fed, but pay attention to projections and what’s actually said during the press conferences. The market will be looking for clues about what’s ahead.
2. Bond Yields on Watch
How yields are looking right now:
- U.S. 10-Year (US10Y): 4.02%
- U.S. 30-Year (US30Y): 4.65% – the rally has cooled a bit since early September.
- Canada 5-Year (CA5Y): 2.71% – this rate matters to mortgage rates in Canada.
- Canada 30-Year (CA30Y): 3.51%
Yields matter because the BoC and Fed are essentially trying to impact the bond market. Don’t forget—the bond market can move mountains.
3. Narrow Trading Ranges
Trading ranges on the major indices have really narrowed.
This isn’t surprising; it happens ahead of major announcements.
Can’t stress this enough: during the rate announcements and even the press conferences, you’ll see indices react big. But those moves can be completely wrong.
Markets need time to digest. The real trend shows up later. By Friday, we should have a good idea of what’s happening.
4. Metals Pullback Ahead of Cuts
Seeing metals selling off early this morning, ahead of the rate cuts.
This is classic profit-taking in my opinion.
Let’s see how it plays out after the announcement. I wouldn’t be surprised if metals sell off even more with a cut. Why? Because everyone front-loaded ahead of the cuts (bought the rumor) and could now sell the news.
Big picture remains super in favor of gold and silver. Watching this closely.
5. Currencies & Crypto on the Move
The U.S. dollar is weakening ahead of the cut. 96.50 is a big level to watch on the Dollar Index.
Technically, the Canadian dollar is forming a W-pattern with potential for a breakout. Watch for a rally near 0.7290 in the near term.
Other things on the radar:
- China possibly banning Nvidia’s AI chips.
- Bitcoin holding up very well lately – be mindful of the potential for a big move here.