The Bank of Canada ended its bond purchase stimulus plan and advanced the timing of potential future interest rate hikes for fear of supply disruptions that would push up inflation. In a policy statement on Wednesday, policymakers headed by Bank of Canada Governor Tiff Macklem announced that they would stop increasing their holdings of Canadian government bonds, thus ending their quantitative easing program. Since the Covid-19 pandemic, the country's quantitative easing program has injected hundreds of billions of Canadian dollars into the financial system. They also hinted that they may be ready to raise interest rates as early as April because supply problems limit the economy's ability to grow without boosting inflation.

The Central Bank of Brazil has increased the pace of interest rate hikes to 150 basis points because the plan to increase public spending before the 2022 election has prompted economists to expect that inflation will be higher than the target in the foreseeable future. The central bank raised the benchmark interest rate to 7.75% on Wednesday, as expected by most economists surveyed by Bloomberg, and promised to raise interest rates by another 150 basis points at the next meeting in December. This is the most radical currency tightening in the country in two decades.

The trend of flattening of the global Treasury yield curve is accelerating. This trend sent an early warning signal to the central bank: the withdrawal of stimulus measures may trigger a slowdown in economic growth. Driven by the central bank’s withdrawal or preparations to withdraw from the easing policy, the gap between short-term and long-term government bond yields has been narrowing. The reduction in the scale of government bond issuance announced by the UK on Wednesday has exceeded expectations, which has intensified this momentum. The yield on the UK’s 30-year Treasury note hit its biggest decline since March 2020.

The US goods trade deficit widened to a record high in September, as exports fell for the first time in seven months. Data released by the US Department of Commerce on Wednesday showed that the September merchandise trade deficit increased from 88.2 billion US dollars in August to 96.3 billion US dollars. Economists surveyed by Bloomberg estimated a median deficit of $88.3 billion. The data has not been adjusted for inflation. Imports increased by 0.5% to 238.4 billion U.S. dollars. Exports fell by 4.7% from the record high set in August to 142.2 billion U.S. dollars.

Iran stated that it has reached an agreement with the European Union to restart nuclear negotiations before the end of November, and the specific date will be announced next week. Iranian Deputy Foreign Minister Ali Bagheri Kani made the above comments via Twitter after meeting with Enrique Mora, the highest diplomatic official of the European Union. He did not disclose where the nuclear talks will be held and the identity of the attendees. US State Department spokesperson Ned Price said that the United States will discuss Iran with its European allies on the sidelines of the G20 summit this weekend. White House spokesperson Jen Psaki reiterated that the United States is committed to diplomatic channels.

Russian President Vladimir Putin told Gazprom that once the company completes domestic restocking, it will start filling its European gas storage facilities on November 8. The price of natural gas in Europe has fallen, and this move is considered to ease supply tensions in Europe. Putin told Gazprom CEO Alexey Miller on Wednesday, “I invite you, once you complete the restocking of Russian underground gas tanks on or before November 8, you will begin to gradually and planned to increase your European Stock quantity: in Austria and Germany."

Bitcoin fell below $60,000, and traders closed their positions to a new high in a month. As of 10:44 London time, the price of Bitcoin fell 5% to $58,975, hitting a new intraday low in nearly two weeks. Ether fell about 5%, smaller cryptocurrencies were hit, Dash and EOS fell more than 10%. Analysts said that the previous launch of the first Bitcoin exchange-traded fund (ETF) in the United States has stimulated investor enthusiasm and pushed the price to a record high, and speculators are currently cutting their positions.

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