Bank of Canada continues the hawkish rally.

North American equities climbed to a month high as treasury yields halted their surge, despite the Bank of Canada raising interest rates by 0.75% to 3.25%. S&P 500 and tech-heavy Nasdaq added 1.83% and 2.14% and Canada’s S&P/TSX Composite added 0.80%.

 

All sectors ended in green except for energy4, which slumped on declining oil prices. While most forecasts showed no lower than 90 a barrel, West Texas Intermediate crude oil fell to 82 a barrel, which was last seen in January. The lower oil prices eased market concerns that price pressure will not derail US central banks from curbing the hot inflation.

 

Canada’s Central bank also continued its rate hike journey by delivering another 0.75% interest rate increase to keep the policy rate at 3.25%. The soaring mortgage rates are pushing down the housing market in both US and Canada, with homeowners seeing their wealth shrinking.

 

The continued hawkishness of the US and Canada put their currencies on top of the well-performing currencies, while the Japanese Yen continues to be the worst-performing major currency. Once unimagined, the British pound dropped to 1.15 against the US dollar, the lowest level since 1985. Euro and Sterling continue to weaken against US and Canadian dollar as the European countries are reluctant to keep up with the hawkish tone in North America.