Bank of Canada hikes to 2.50%, first hike since 2023; RBNZ holds with December hike odds 'high' as global central banks turn hawkish (Oct 29)
What happened
The Bank of Canada raised its overnight rate 25 basis points to 2.50%, its first hike since 2023, explicitly citing rising oil-driven inflation. The Reserve Bank of New Zealand surprised markets by holding its official cash rate at 2.75%, but its governor said the chances of a December hike are 'high,' sending the NZ dollar sharply lower. Japan's trend inflation hit a three-year high, with the Bank of Japan expected to hold at its Friday decision while signaling further hikes, and the ECB decides today with an ~84% priced-in chance of a December hike after eurozone inflation hit 3.8%. U.S. 10-year Treasury yields pushed to ~5.02% as markets priced a coordinated global turn toward tighter policy.
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Who’s affected
- U.S. broad market (SPY) — higher-for-longer global rates tighten financial conditions and pressure long-duration equities
- Rate-sensitive tech and growth stocks (Nasdaq/QQQ) — rising 10-year yields (5.02%) compress valuations
- Banks/financials (JPM, MS, GS, WFC) — positively exposed via wider net interest margins; they advanced after the Fed decision
- Bond proxies, utilities and REITs — negative, yield competition
- Gold — negative, slipped to ~$4,028 on hike bets and a firmer dollar