“Expect 3 more rate hikes from the Bank of Canada in 2018.”

The Bank of Canada has raised its official cash Rate to 1.25% overnight with the Market now pricing in the potential for 3 more rate hikes in 2018. The BOC said that inflation was close to 2% and went on to say “capital investment, firm creation, labour force participation, and hours worked are all showing promising signs. Recent data show that labour market slack is being absorbed more quickly than anticipated. Wages have picked up but are rising by less than would be typical in the absence of labour market slack.” The Canadian Dollar is higher post the rate decision and I anticipate it to remain supported in coming months against most of its major rivals.

As I write the Dow Jones is surging rising over 250 points following better than expected US economic data and an earnings upgrade for one of the USA biggest banks. The advancing stocks vs the declining stocks are currently at more than 2:1 as the latest company earnings season begins. I expect the stock market in the USA to again outperform in the first half of 2018 with inflation soon to pick up further. The USD v JPY is now being viewed as “cheap” with traders once again buying back into the US Dollar.

The Aussie Dollar will no doubt see increased volatility at 11.30am AEDST today when the latest unemployment figures are released. The market expects the official unemployment rate to remain steady at 5.4% however it’s often the case that a change in the official unemployment rate doesn’t move the AUD as much as the other data numbers that are released at the same time. The market is expecting 15,000 jobs were created in the month of December after a surprise 60,000 jobs were created in November. If we see a higher number than 15,000 then traders are likely going to buy the AUD pricing in further likely positive numbers in other economic data releases such as inflation and growth. Currently, the market is not pricing in any rate hike from the RBA in the first half of 2018 however if today’s unemployment rate and future economic indicators show improvement the AUD will once again be trading above 0.80c against the US Dollar. China’s December GDP figures are also set for release today and if they beat the market’s estimates, which is likely we would continue to see the AUD supported.

Bitcoin continues to slide lower this time hitting a low of $9218 with two hours to go in the US trading session. The gap closing price I mentioned yesterday in my daily video update is $8227 and I would expect this price to be targeted by traders in the coming 24 to 48 hours. I am currently in the USA and have been reading reports of investors mortgaging their homes to buy Bitcoin last month when the price was $19,000. 99% of Bitcoin traders and investors have no real idea what they are buying, they think they do, they will try and tell you they do but in reality, they don’t. Millions of investors will now have lost small and large fortunes chasing this cryptocurrency fad. Just because an organisation such as the Chicago Board of Trade offers Bitcoin to trade doesn’t give it any more legitimacy in my book. They CBOT offered it because they know millions of investors will buy it and they will make a fortune from the transactions. The CBOT has no interest in whether or not the average mum and dad investor makes or loses money, it’s all about the volume of trading. The hysteria Bitcoin created before Xmas is a good lesson for all investors because getting sucked into chasing a market because you have a fear of missing out is always likely going to end badly.

About the Author: Andrew Barnett

Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).

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The post Today’s Key Market Drivers: 18th January 2018 appeared first on LTG GoldRock.