- USD/CAD is trading sharply higher on Thursday and targeting a test of the 1.2600 level after climbing above 1.2480 resistance.
- The pair is experiencing a late outperformance in the wake of Wednesday’s US CPI report.
USD/CAD is experiencing a delayed outperformance on Thursday. In the wake of a much stronger than expected consumer price inflation (CPI) report on Wednesday. As a result, the US dollar rose against most of its G10 counterparts, but not the Canadian dollar.
Since the USD/CAD was attempting to move higher, it ran into resistance in the form of recent highs and the 200-day moving average around the 1.2480 level. USD/CAD concluded the session with a 0.4 percent gain (compared to GBP/USD, EUR/USD, and USD/JPY, which all increased more).
The pair was eventually able to break over major resistance during the Asian session hours. And then soared above the 1.2500 level, into the 50 DMA at 1.2535, and is now approaching 1.2600.
Oil prices fell dramatically on Wednesday. Owing to concerns that rising inflation in the United States could force the Biden administration to release crude oil inventories in order to offset rising energy costs. Although prices are higher on Thursday. They are still a long way from pre-CPI data levels, so crude oil weakness is one explanation for the Canadian dollar’s significant drop on Thursday.
Another explanation for the Canadian dollar’s underperformance is that the Canadian rate advantage over the US rate has been slightly diminished in the aftermath of the US CPI report (as traders increase their bets on a more hawkish Fed in 2022).
U.S. 5-year government bond yields experienced a 14 basis point increase to 1.22%
The yield on a five-year government bond in the United States jumped 14 basis points to 1.22 percent. While the yield on a five-year government bond in Canada rose 10 basis points. And additionally couldn’t get back beyond 1.50 percent. In comparison to the Fed, the government bond and short-term interest rate (STIR) markets continue to price in a significantly more hawkish BoC.
However, a rising number of economists and experts are beginning to realize that this viewpoint is erroneous. “Markets overestimated BoC action in 2022 and underpriced the Fed beyond 2022,” according to CIBC. “We see USD/CAD moving over 1.30 next year as it becomes evident that Canada’s central bank will not outperform the Fed,” the bank says, before adding, “we see USD/CAD moving above 1.30 next year as it becomes clear that Canada’s central bank will not outperform the Fed.”
Microsoft clearly engages in the metaverse using Q2 earnings call
Satya Nadella, CEO of Microsoft, revealed his vision for the metaverse at the company’s Q2 2022 earnings call.
Overall, the company’s Q2 2022 filing showed a significant increase in cloud-based services. Microsoft reported $51.7 billion in revenue, a 20% increase over the previous year. Intelligent Cloud revenue was $18.3 billion, a 26 percent increase over the previous year. Azure drove a 29 percent increase in sales for server goods and cloud services. As well as a 46 percent increase in revenue for other cloud services.
Among the trends noted by Nadella on the earnings call was a “structural shift in PC demand.”
According to Microsoft CFO Amy Hood, Windows revenue from PC manufacturers increased by 25%, which was “far over expectations”. She stated that demand was being driven by the PC market’s success, particularly in the commercial category.
According to an earnings call transcript obtained on the financial blog site Seeking Alpha, Nadella envisions the metaverse as the next wave of the Internet. “Just as the initial wave of the Internet has allowed anyone to construct a website, I believe the next wave of the Internet will be a more open world where people, whether companies, game developers, or anyone else, may create their own metaverse world,” he stated.
“The first place we see this is the increasing digitization of people, places, and things to truly enable organizations automate operations at the next level,” he explained. “So, today, we have a number of examples of customers engaging with us through Azure IoT, Digital Twins, and Mesh. So that’s what you’ll see in Azure, and we’re investing heavily on it.”
Nadella sees prospects for Dynamics 365 Connected Spaces further up the software stack. This in-development technology is to control physical operations in physical areas such as a store, a connected factory, or a building. “We now have a suite that powers entirely by connected spaces,” he explained. Microsoft’s goal, he noted, is to automate physical operations.
Style.me introduces its wearable NFTs in the metaverse
Style.me, the industry-leading 3D fashion technology company, has launched a new innovative offering that enables designers to become metaverse-capable creators. In addition this latest step extends the company’s solutions into the world of digital fashion and NFTs. Moreover building on its growing success in virtual fitting and styling.
The company Style.me mints and distributes fashion NFTs
Style.me creates and distributes fashion NFTs, allowing people to wear, share, and use them across the metaverse. In addition, the company gives its partners the ability to bring their physical collections into the digital realm through bespoke “phygital” experiences.
The company Style.me’s plug-and-play technologies will allow metaverse projects to make digital fashion accessible to their communities. New experiences, such as virtual runway presentations, exhibitions, and live events, will be possible for designers and companies.
Style.me, with its 3D and AR technologies, is at the forefront of making digital fashion more accessible
Fashion NFT utilities are now limited, and Style.me is at the forefront of making digital fashion more accessible with its 3D and AR technology.
Style.me’s President, Rufus Parkinson, stated. “Style.me’s mission has been to enable consumers to see and interact with fashion in the digital environment since its inception. We believe that digital fashion and NFTs will alter the industry by allowing us to leverage our patented technology to open up a new dimension of user experiences.”
Combined with blockchain technology and the rapid expansion of the metaverse, digital fashion will explode in the next few years. Morgan Stanley estimates that the premium digital fashion sector alone will reach $20 billion by 2030.
Style.me’s goods are already in high demand, with consumption rising 386 percent in the last year, and this additional fashion NFT offering offers up even more prospects for growth in the digital fashion industry.
Metaverse: Tencent is updating QQ with the Unreal game engine
According to an upgraded version of the program, Tencent Holdings has stealthily integrated the Unreal Engine video game engine into its increasingly obsolete QQ messaging network. Hence, analysts believe the move is part of the social media and gaming giant’s entrance into the metaverse.
According to LibChecker, a third-party app inspection tool, the Shenzhen-based company updated QQ last month. The new version, which was formerly a chat app, includes portions of the Unreal Engine video game engine.
Tencent launched a new app feature called Super QQ Show, which is a 3D interactive arena where users can socialize, watch shows, and play games, at the same time as the update. As a result, observers claim the move is Tencent’s latest attempt to establish a footprint in the metaverse.
The decision also demonstrates Tencent’s commitment to resuscitate QQ, its second most popular messaging platform behind WeChat with 590 million monthly active users, which had fallen out of favor in recent years as Chinese netizens shifted their attention to short videos and other platforms.
In China, the metaverse is gaining traction. Although the country has not yet developed a national plan for the concept, like South Korea has, officials in some key cities have pushed businesses to investigate it. For example, one of four frontiers to explore in Shanghai’s future five-year plan is the metaverse.
The Super QQ Show is currently under testing by a small number of users. Tencent staff uploaded screenshots and video footage of the functionality. Which shows players dressing up their avatars in 3D, decorating their homes, and visiting others. Thus similar to Nintendo’s Animal Crossing video game franchise.
The Unreal Engine is utilized in successful games such as Bioshock and Mass Effect. Tencent owns a 40% share in Epic Games, which operates the engine in the United States. Last year, Epic Games was one of the first worldwide tech behemoths to make metaverse development a top priority. Epic’s flagship game, Fortnite, considered as one of the market’s leading metaverse initiatives.
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