Gold has broken to a fresh five month high above $1300, with both CHF and JPY outperforming—providing signals typically seen as being suggestive of risk aversion as we note renewed declines in oil, copper and equity futures. However, the USD is weakening broadly and U.S. yields are stable, making for a disjointed tone overall. Central banks remain in focus ahead of the Bank of Canada decision, as the BoJ has made upward revisions to the growth forecast and softened expectations for inflation, while the BoE’s two hawks have softened their stance with a shift back to neutral. U.S. releases include housing starts and building permits—both are expected to improve.
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