# Marketmind: O Canada! Markets wary of Fed hawkish surprise
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-06-08
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Marketmind: Bank of Canada hikes rates, markets wary of Fed
Meta Description: Get insights on the latest rate hike by the Bank of Canada and its impact on market expectations for the U.S. Federal Reserve. Stay ahead with Marketmind.
URL: https://financedigest.com/marketmind-o-canada-markets-wary-of-fed-hawkish-surprisehtml

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# Marketmind: O Canada! Markets wary of Fed hawkish surprise

A look at the day ahead in European and global markets from Ankur Banerjee

Another day, another surprise hike. After the Reserve Bank of Australia’s surprise earlier this week, it was the Bank of Canada’s turn to stun markets with a 25 basis-point hike that led traders to dial back expectations of the U.S. Federal Reserve standing pat next week and sweat over the policy outlook.

Broader consensus is that the [Fed will do at least one more hike](https://www.financedigest.com/global-shares-rise-dollar-rebounds-as-fed-seen-on-target-for-rate-hike.html "Global shares rise, dollar rebounds as Fed seen on target for rate hike"). The question is whether it comes next week or in July. The CME FedWatch tool showed the probability of the Fed hiking by 25 bps next week is 36%, it was 22% a day earlier.

More than 90% of economists, 78 of 86, polled by Reuters said the policy-setting Federal Open [Market Committee would hold its federal funds rate](https://www.financedigest.com/despite-concerns-over-brexit-uk-rated-as-most-attractive-commercial-real-estate-market.html "Despite concerns over Brexit, UK rated as most attractive commercial real estate market") at 5.00% to 5.25% next week. More than a third though expect the Fed to [raise rates](https://www.financedigest.com/snb-defends-raising-rates-says-not-to-blame-for-credit-suisse-failure.html "SNB defends raising rates, says not to blame for Credit Suisse failure") at least once more this year.

And so, investors are in a tetchy mood, with the MSCI Asia ex-Japan a bit lower, the U.S. dollar index flattish and U.S. Treasuries holding on to gains in Asian trade.

With a light [data calendar and futures](https://www.financedigest.com/the-future-of-insurance-is-data-driven.html "The future of insurance is data driven") pointing to a mixed open in Europe, markets could drift on Thursday. Next week’s series of central bank meetings will remain at the forefront of [market minds](https://www.financedigest.com/transfer-firm-moves-into-polish-markets-with-the-unbanked-in-mind.html "Transfer Firm Moves Into Polish Markets With The Unbanked In Mind").

Meanwhile, revised data showed Japan’s economy grew more than initially thought in January-March, helping the yen strengthen.

In the corporate world, GameStop ousted its CEO and made Ryan Cohen, the billionaire investor whose [bet on the video retailer made him popular among meme stock](https://www.financedigest.com/stocks-surge-in-asia-as-us-averts-default-fed-pause-bets-rise.html "Stocks surge in Asia as US averts default, Fed pause bets rise") traders, its executive chairman.

Coinbase CEO Brian Armstrong hit back at U.S. Securities and Exchange Commission Chair Gary Gensler over the agency’s lawsuit against the [crypto](https://www.financedigest.com/analysis-us-sec-crackdown-on-coinbase-binance-puts-crypto-exchanges-on-notice.html "Analysis-US SEC crackdown on Coinbase, Binance puts crypto exchanges on notice") exchange, calling him an “outlier” while reassuring customers their funds were safe.

[Key developments that could influence markets](https://www.financedigest.com/the-impact-of-economic-indicators-on-financial-markets-understanding-the-key-drivers.html "The Impact of Economic Indicators on Financial Markets: Understanding the Key Drivers") on Thursday:

Economic events: [euro zone](https://www.financedigest.com/euro-zone-business-growth-slowed-in-may-as-factories-struggled-pmi.html "Euro zone business growth slowed in May as factories struggled-PMI") Q1 GDP and employment data

(Reporting by Ankur Banerjee in Singapore; Editing by Christopher Cushing)


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