The Toronto Stock Exchange closed sharply lower on Thursday for the second time in a week, with the resources-heavy exchange weighed down by deflated commodity prices and fresh economic updates, as data showed signs of a slowdown in the U.S. labor market and as Desjardins noted the Bank of Canada Governor has thrown "more cold water on the possibility of rate cuts".
* Bank of England leaves rates unchanged, pound drops. * Dollar strengthens amid risk aversion and central bank decisions. * Bitcoin tumbles, hits lowest since October 2024. By Laura Matthews. The U.S. dollar hit a two-week high on Thursday as fresh volatility gripped stocks and the pound tumbled after the Bank of England voted by a razor-thin margin to leave UK rates unchanged.
Restructuring the Canadian economy to cope with U.S. tariffs, slower population growth and the rise of artificial intelligence will take years, and could be painful, Bank of Canada Governor Tiff Macklem said on Thursday. Macklem ?urged policymakers and businesses to do all they could to adjust to the new challenges, saying Canada could ?not afford to fail.
* Canadian dollar falls 0.1% against the greenback. * Trades in a range of 1.3653 to 1.3699. * Price of oil settles 2.8% lower. * Canadian yields ease across the curve. By Fergal Smith.
Atlanta Fed President Raphael Bostic said that he believes the FOMC should hold rates steady in 2026 and that it will take time for Kevin Warsh, the nominee to replace Jerome Powell as Fed share, to convince a majority of the committee that rates need to be lower.
* Rate hold is first pause since mid-2024. * Central bank now sees inflation hitting target in Q2 2027. * Analysts expect Banxico to hold rate for much of 2026. By Brendan O'Boyle. The Bank of Mexico's governing board unanimously held its benchmark interest rate at 7.00% on Thursday, in line with market expectations ?after recent upticks in both inflation and economic growth.
The Bank ?of Mexico ?held its benchmark ?interest rate ?at ?7.00% on ?Thursday, ?in line with expectations ?amid ?recent ?upticks in both inflation and ?economic growth. The decision by the central ?bank's ?five-member governing board was ?unanimous, the bank said in a statement.
Bank of Canada Governor Tiff Macklem ?on Thursday ?welcomed the ?nomination of ?Kevin ?Warsh as chair of ?the U.S. ?Federal Reserve, saying he ?had ?a ?deep knowledge of financial markets and ?the international monetary system. "I'm looking forward to working ?with ?Kevin," he said in ?a question and answer session after giving a speech in ?Toronto.
Brazil's trade surplus reached $4.3 billion in January, the Ministry of Development, Industry, Trade and Services ?said on Thursday, up 85.8% from a year ?earlier but below the $4.9 billion expected by ?economists in a Reuters ?poll. Exports from ?Latin America's largest economy fell 1.0% from a year ?earlier to $25.2 billion, ?while imports dropped a sharper 9.8% to $20.8 billion.
Restructuring the Canadian economy to cope with U.S. tariffs, slower population growth and the rise of artificial intelligence will take years, and could be painful, Bank of Canada Governor Tiff Macklem said on Thursday. Macklem urged policymakers and businesses to ?do all they could to adjust to the new challenges, saying Canada could not afford to fail.
The World Economic Forum has launched an independent investigation into its CEO Borge ?Brende to clarify his relationship ?with sex offender Jeffrey Epstein, ?the organisation said ?on Thursday.
The European stock markets were tracking lower in Thursday trading as The Stoxx Europe fell 1.1%, Germany's DAX dropped 0.5%, the FTSE 100 lost 0.9%, France's CAC was down 0.3%, and the Swiss Market Index declined 0.3%. The European Central Bank decided to keep its three key interest rates unchanged.
* Bank of England leaves rates unchanged, pound drops. * Dollar strengthens amid risk aversion and central bank decisions. By Laura Matthews and Amanda Cooper. The U.S. dollar hit a nearly two-week high on Thursday as fresh volatility gripped stocks and the pound tumbled after a razor-thin Bank of England vote left UK rates unchanged.
The Czech central bank on Thursday said its board kept interest rates unchanged, with the two-week repo rate at 3.50%, the discount rate at 2.50% and the Lombard rate at 4.50%. This decision was expected by market analysts, Societe Generale noted before the decision. All seven members voted in favor of this decision, wrote CNB in its policy statement.
President Christine Lagarde's comments at Thursday's policy meeting press conference seemed to create more confusion than certainty over the next European Central Bank move, said ING.
European Central Bank President Christine Lagarde will present EU leaders next week with a checklist of measures needed to enhance growth and competitiveness, taking an unusual step to raise pressure on governments to speed up ?a slow and often timid reform process.
U.S. Treasury Secretary Scott Bessent on Thursday declined to commit that the Trump administration would not sue Kevin Warsh, its nominee to lead the Federal Reserve, if he follows a monetary path opposed by the president.
U.S. Treasury Secretary Scott Bessent on Thursday said ?he supports President ?Donald Trump's call for capping ?credit card ?interest ?rates at 10% for one ?year. "I wholeheartedly ?support President Trump's policy," Bessent told ?the ?Senate ?Banking Committee, when asked about the call.
U.S. Treasury Secretary Scott Bessent declined on ?Thursday to commit the ?Trump administration to ?not suing Kevin Warsh, ?its ?nominee to be Federal ?Reserve Chair, ?if he follows a monetary path ?opposed by ?the ?president.
The Indian central bank has approved private equity firm Blackstone's acquisition of up to ?a 9.99% stake in Federal Bank, the ?private lender said on Thursday. The deal, ?which would make Blackstone ?the largest shareholder ?in the bank, adds to the growing list ?of large investments by ?marquee investors in the financial services sector in India.
Thursday's wafer-thin majority on the Bank of England's Monetary Policy Committee in favor of holding Bank Rate at 3.75% instead of lowering it by 25bp indicates that it won't be long before the BoE lowers interest rates again, said Berenberg. The 5-4 vote was much closer than the consensus of 7-2, noted the bank.
* Weekly jobless claims increase 22,000 to 231,000. * Continuing claims rise 25,000 to 1.844 million. * Job openings drop 386,000 to 6.542 million in December. * Hiring advances 172,000 to 5.293 million; quits steady. By Lucia Mutikani.
Following is the text of European Central Bank President Christine Lagarde's statement after the bank's policy meeting on Thursday: Link to statement on ECB website: https://www.ecb.europa.eu/press/press_conference/monetary-policy-statement/2026/html/ecb.is260205~50858cb986.en.html. Good afternoon, the Vice-President and I welcome you to our press conference.
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US equity futures were down ahead of Thursday's opening bell as traders digested labor market data ahead Amazon's (AMZN) earnings report. Dow Jones Industrial Average futures were 0.3% lower, S&P 500 futures were down 0.5%, and Nasdaq futures were 0.7% lower. Amazon (AMZN) is scheduled to report earnings after the closing bell.
The European Central Bank decided to keep rates on hold on Thursday, said ING. The official policy announcement also illustrates that the ECB still sits comfortably in its 'good place', wrote the bank in a note. As the last ECB rate cut dates back to June last year, it's fair to say that the hurdle to cut again is very high, stated ING.
US initial jobless claims rose to a level of 231,000 in the week ended Jan. 31 from an unrevised 209,000 level in the previous week, compared with expectations for a smaller increase to 212,000 in survey of analysts compiled by Bloomberg. The four-week moving average increased by 6,000 to 212,250 after increasing by 2,250 to a level of 206,250 in the previous week.
The number of Americans filing new applications for unemployment benefits increased more than expected last week amid winter storms, and while job openings fell to a more than five-year low in December, the decline was concentrated in a single industry.
The number of Americans filing new applications for unemployment benefits increased more than expected last week, likely boosted by snowstorms across much of the country, but labor market conditions remain stable. Initial claims for state unemployment benefits jumped 22,000 to a ?seasonally adjusted 231,000 for the week ended January 31, the Labor Department said on Thursday.
* FTSE 100 down 0.9% and FTSE 250 down 1% * Shell misses profit expectations, drags energy stocks lower. * Bank of England holds rates after narrow 5-4 vote. * Rio Tinto and Glencore scrap merger talks. * Software, tech stocks rebound from global rout. By Tharuniyaa Lakshmi.
Bank of England governor Andrew Bailey on Thursday ?welcomed U.S. President ?Donald Trump's choice of ?former Federal ?Reserve ?Governor Kevin Warsh to ?head the U.S. ?central bank when Jerome Powell's ?leadership ?term ?ends in May. "I welcome the nomination of Kevin ?Warsh," Bailey told a press conference.
* Pound and gilts hit as vote sends doveish signal. * Policymakers voted 5-4 to keep rates at 3.75% * Reuters poll had expected 7-2 vote split. * Lower inflation, political risk in focus. By Lucy Raitano.
The US dollar rose against its major trading partners early Thursday ahead of the release of weekly jobless claims data at 8:30 am ET, rescheduled job openings and hiring data for December at 10:00 am ET and weekly natural gas stocks data at 10:30 am ET. Atlanta Federal Reserve President Raphael Bostic is due to speak at 10:50 am ET.
Federal Reserve Governor Lisa Cook signaled a cautious ?wait and see? approach to monetary policy on Wednesday, describing current interest rates as only ?mildly restrictive? while expressing concern over a ?K-shaped? economic divergence that is leaving low-income families behind.
BBVA Research said it expects Mexico's central bank to leave the policy rate unchanged at 7.00% later Thursday and to continue to stress downside risks to growth despite near-term inflation risks. BBVA Research estimates that Banxico will revise its inflation forecasts upward.
* Bank of England leaves rates unchanged, pound drops. * Euro down ahead of ECB decision, focus on rate outlook. * Dollar strengthens amid risk aversion and central bank decisions. By Amanda Cooper.
* BoE keeps Bank Rate at 3.75%, as expected. * MPC's 5-4 vote was closer than 7-2 seen in Reuters poll. * Policymakers expect further reduction in rates. * BoE cuts inflation forecasts, sees less growth in 2026. * Some MPC members worry inflation might stay too high. By William Schomberg, David Milliken and Andy Bruce.
Sterling and two-year gilt yields fell on Thursday after the Bank of ?England held rates steady in a ?surprisingly narrow vote and said ?it expected a future ?cut if ?inflation continued to slow.
Euro zone bond yields were broadly steady on Thursday against a backdrop of fragile global markets and ahead of a European Central Bank interest rate decision which investors widely expect will keep rates unchanged.
The euro has continued to correct lower against the US dollar ahead of Thursday's European Central Bank policy meeting, said MUFG. After briefly hitting a high of 1.2081 last week, EUR/USD has dipped back below the 1.1800 level overnight Wednesday, wrote the bank in a note to clients.
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European bourses tracked moderately lower midday Thursday despite firming tech stocks, as traders awaited pending rate-decisions by the Bank of England and European Central Bank. Retail stocks also led gains on continental trading floors, while bank and property shares lagged. On the commodities front, British oil major Shell slipped 0.7% after missing Q4 profit expectations.
The EUR/USD this week has remained quite resilient -- especially given the recent spike in energy prices, said ING. Thursday's challenge to EUR/USD will come from the European Central Bank press conference on the policy decision later in the day at 2:45 p.m. CET. It isn't just EUR/USD that has been strong.
* FTSE 100 down 0.4% and FTSE 250 down 0.7% * Shell misses profit expectations, drags energy stocks lower. * BoE expected to hold rates. * Software, tech stocks ?rebound from global rout.
In the 15 years since leaving the Federal Reserve, Kevin Warsh has lectured often that the ideal central bank is one with the smallest possible footprint in the economy, focused intently on controlling inflation, and bound in part by policy rules rather than letting officials act as free-ranging "overlords."
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.
Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.
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