Summary:

•  Stock markets sell off on more political drama in Washington
• Tillerson firing sees gains from CPI handed back 
• CAD sinks as Poloz strikes dovish chords
• Crypto fail to hold on to gains after upbeat remarks
• OECD raises forecast for global growth

There’s been some pretty sizable selling seen in stock indices this afternoon with the US100 falling into the red after earlier positing a new record high and the DE30 slipping almost 2% as more political drama from Washington threatens to derail the markets. Trump took to twitter to reveal that he had replaced Secretary of State Rex Tillerson with CIA Director Mike Pompeo in yet another reshuffle that comes less than a week since Gary Cohn left his role. 

Shortly before this unexpected revelation we has inflation figures from the US with the CPI Y/Y coming in as expected at 2.2% and the core reading matching forecasts at 1.8%. The market reaction seem to be strikingly similar to that following the NFP report last Friday. Whilst inflation is relatively high, it is not showing the sort of acceleration that would warrant a faster than expected pace of tightening this year – IE 4+ hikes. 

Turning our attention to the FX space, there’s been a fairly sharp move lower in the Canadian dollar this afternoon following  a speech from Bank of Canada (BOC) Governor Poloz in which he adopted a more dovish than expected tone. 

Earlier today crypto markets were moving higher on  remarks coming from the chairman of the European Banking Authority Andrea Enria. He spoke against excessive regulations of virtual currencies as too strict law might constrain or even kill financial innovation. Bitcoin has moved back above the 9000 handle during today’s trade and is higher by a little over 2% on the European cash close. 

The OECD released its report where it decided to lift global growth forecast compared to the November projections despite risks stemming from a possible trade war as well as rising stocks’ valuation. As per the newest estimate the global economy will expand 3.9% this and the following year compared to 3.7% seen at the end of the past year.