Weekly Economic Update

For the week of December 10 – 14

Employment figures crushed expectations in Canada for the month of November. The country added 94.1K new positions against expectations of a mere 10K. This position increase is the largest one month gain since 1976. Digging further into this release unveils another positive fact which is that of the 94.1K positions, 89.9K of them were the more desirable full-time positions. The posting shows resilience in the job market despite the headwinds stemming from an oil crisis. One darker spot of note is wage inflation which fell to a level of 1.5 percent, down from 1.9 percent in the previous month and short of the expected 1.8 percent. The unemployment rate fell to 5.6 percent from 5.8 percent in the prior reading.

Nonfarm payrolls in the United States missed expectations for November with only 155K new positions created, shy of the 198K expected. Average hourly earnings missed expectations slightly on a month-over-month basis at 0.2 percent, but are still in line with the 3.1 percent year-over-year growth that was expected. The unemployment rate in the US remained unchanged at 3.7 percent.

It is shaping up to be a quiet week for data released out of Canada this week with the only potentially market-moving data coming from housing starts and building permits this morning. November’s housing starts are following a posting of 205.9K a month prior. In terms of October’s building permits, today’s reading is following growth of 0.4 percent in September. Data releases will be a bit more exciting out of the United States this week, with releases expected for consumer prices, retail sales and market US manufacturing PMI among others.

The Canadian dollar is currently trading slightly up against the US dollar after a large spike on Friday from stronger than expected jobs data. Todays expected range is 1.3264 – 1.3364.

Source: Bloomberg

Weekly Economic Update

For the week of December 3 – 7.

GDP released weaker than expected for the month of September in Canada. Instead of increasing by 0.1 percent as expected, the measure dropped by 0.1 percent on a month-over-month basis. Growth missed expectations on a year-over-year basis as well, growing by only 2.1 percent. In terms of quarterly annualized GDP, the measure is sitting at 2.0 percent for the third quarter, in line with expectations.

shutterstock_1232785735_950x950Data releases in Canada this week include International Merchandise Trade, employment, housing starts, and building permits. November employment in the country is expected to have increased by 10.0K positions after a similar increase of 11.2K in October. The Bank of Canada is also holding a policy meeting on Wednesday. Currently, the markets are pricing in a zero percent chance of an interest rate hike at this meeting. The implied probability increases to 57.7 percent for the following meeting in January.

Data releases in the United States this week include ISM manufacturing, ADP employment change, Trade balance, employment and wholesale inventories, and trade sales. In addition, the Fed will also be releasing its Beige Book on Wednesday.

The Canadian dollar is currently trading up against the US dollar. Today’s expected range is 1.3145 – 1.3245.

Source: Bloomberg

Weekly Economic Update

For Week of November 26 – 30, 2018

It will be a relatively slow week for data releases out of Canada until Friday when we will see the release of September GDP figures as well as third quarter GDP figures. Although economist expectations are not available yet, the postings will follow a quarterly annualized GDP posting of 2.9 percent, a month-over-month GDP posting of 0.1 percent and a year-over-year GDP posting of 2.5 percent.

In the United States this week we are expecting releases for wholesale inventories, annualized quarter-over-quarter GDP growth, new home sales, personal income and spending, and new home sales. In addition to these data releases, the FOMC will also be releasing their November 8 meeting minutes on Thursday.

Retail sales in Canada beat expectations in September, growing by 0.2 percent when expectations were for zero growth. Excluding autos from this figure brought the growth level down slightly to 0.1 percent. Consumer prices jumped by 0.3 percent on a headline month-over-month basis in October, triple economist expectations. On a year-over-year basis, price growth is sitting at a level of 2.4 percent. The largest contributor on the upside was the transportation category while the largest contributor to the downside was the gasoline category.

The Canadian dollar is currently trading up against the US dollar this morning. Todays expected range is 1.3150 – 1.3250.

Source: Bloomberg

Weekly Economic Update

For the week of November 19 – 23.

Data releases in Canada this week include the heavy hitters of consumer prices and retail sales (both released on Friday). The release of retail sales data for September will follow August’s 0.1 percent decline (0.4 percent drop when excluding autos). In terms of consumer prices, Friday’s October figures posting follows a significant 0.4 percent drop on September’s month-over-month basis. Data releases in the United States this week include housing starts, durable goods, existing home sales and Markit US manufacturing PMI.

Manufacturing sales in Canada released stronger than expected in September, growing by 0.2 percent. Excluding auto sales, September’s figure saw a significant drop to -0.5 percent. 8 of the 21 measured industries experienced sale increases. New orders fell by 0.3 percent through the month, while unfilled orders jumped by 0.4 percent. Total inventories were up by 0.3 percent on a month-over-month basis. August’s reported 0.4 percent drop was revised further downward to a drop of 0.5 percent.

The Canadian dollar is currently trading down against the US dollar. Today’s expected range is 1.3128 – 1.3228.

Source: Bloomberg

Weekly Economic Update

For the week of November 12 – 16

It will be a quiet and short week for data in Canada, with the only market-moving data coming in the form of manufacturing sales and international securities transactions, both of which release on Thursday. We will see a bit more out of the United States this week with releases expected for consumer prices, retail sales and industrial production, among others. Consumer prices are expected to have grown by 0.3 percent on a headline basis during October, three times the speed that was seen in September. On a year-over-year basis, this should put growth at 2.5 percent. Excluding food and energy, growth rates are expected to sit at 0.2 and 2.2 percent respectively.

The string of declines in oil prices has reached eleven business days as priced ended the day down by 0.43 percent on Monday. Prices are down by a further 1.94 percent this morning. Prices shrugged off news that a potential 2019 output-cut could be on the table at an OPEC meeting over the weekend. Crude production the United States was at a record high last week with a level of 11.6 million barrels per day.

The Canadian dollar is currently trading up against the US dollar. Todays expected range is 1.3182 – 1.3282.

Source: Bloomberg

Weekly Economic Update

For the week of November 5 – 9, 2018

Employment in Canada missed expectations on a headline basis for October, adding 11.2K positions instead of the 15.0K that was expected. However, details of the release are stronger, with full-time positions actually increasing by 33.9K while part-time positions fell. Hourly earnings growth dropped significantly to 1.9 percent for the month against expectations for 2.3 percent. This marks the fifth month in a row where wage growth has slowed. Canada’s unemployment rate dropped to 5.8 percent due mostly to a shrinking labor force.

In the United States, nonfarm payrolls jumped by 250K in October, a significant beat over the 200K expected for the month. Some of the month’s strength is being attributed to a sort-of recovery from September’s figures which were adversely affected by Hurricane Florence. The unemployment rate in the United States remained unchanged at 3.7 percent.

It is going to be a quiet week for data in Canada, with the only notable release coming in the form of building permits and housing starts on Monday and Wednesday. In the United States, we will see releases for PPI final demand and wholesale inventories along with a Fed policy meeting on Thursday. As of now, the Fed is generally not expected to increase interest rates at this weeks meeting.

The Canadian dollar is currently trading up against the US dollar. Today’s expected range is 1.3048 – 1.3148.

Source: Bloomberg

Weekly Economic Update

For the week of October 29 – November 2.

Scheduled economic releases for Canada this week include update on GDP, new employment figures, and an update on international merchandise trade on Friday. August’s GDP release will follow July’s growth of 0.2 percent and 2.4 percent on a month-over-month and year-over-year basis respectively. In terms of employment, October’s release indicates a strong headline bump of 63.3K positions entirely made of part-time employees.

Scheduled economic releases for the United States this week include personal income, personal spending, ADP employment change, ISM manufacturing, trade balance, nonfarm payrolls and more. Nonfarm payrolls are expected to have jumped by 190K positions through the month of October, following September’s smaller bump of 134K. The unemployment rate is expected to remain at a record low level of 3.7 percent.

Third quarter GDP released on Friday last week came in at 3.5 percent, exceeding expectations of 3.3 percent and following second quarter GDP growth of 4.2 percent. If this pace continues for future readings, the United States will see its strongest back-to-back quarterly GDP readings since 2014. Third quarter strength is expected to have been pushed by business investment and consumer spending.

The Canadian dollar is currently trading up against the US dollar. Today’s expected range is 1.3041 – 1.3141.

Source: Bloomberg

Weekly Economic Update

For the week of October 22 – 26.

The week of the Bank of Canada’s policy meeting has arrived. Outside of the central banks interest decision on Wednesday, the only other notable release this week is from wholesale trade sales this morning. As of today, the market implied probability of the Bank of Canada increasing interest rates on Wednesday is 96.4%. Scheduled data releases in the United States this week include Markit US manufacturing PMI, new home sales, wholesale inventories, durable goods orders, and GDP. Also of note, the European Central Bank will be making a rate decision this week on Thursday.

Missed expectations for both retail sales and consumer prices last Friday ended the week on a disappointing note. Retail sales fell by 0.1 percent in August against expectations for a jump of 0.3 percent. July’s 0.3 percent growth was also revised downward to 0.2 percent.

Although economists were calling for growth of 0.1 percent, consumer prices fell by 0.4 percent in September, marking the second straight month of indicator declines. On a year-over-year basis, prices are up by 2.2 percent, dropping from last month’s reading of 2.8 percent.

The Canadian dollar is currently trading up against the US dollar. Today’s expected range is 1.3033 – 1.3133.

Source: Bloomberg

Weekly Economic Update

For the week of October 15 – 19.

Expected data releases in Canada this week include manufacturing sales, retail sales, and the ever-important consumer prices. Manufacturing sales are expected to have dropped by 0.8 percent in August after increasing by 0.9 percent in July. Retail sales are expected to have increased by 0.4 percent on a headline basis in August, and a lesser 0.2 percent when excluding autos. This 0.4 percent increase follows the slightly lower 0.3 percent gain in July.

Economists expect consumer prices will reverse August’s 0.1 percent decline, and will increase by 0.1 percent for the month of September on a month-over-month basis. The Bank of Canada will most likely be watching the results of this release, since their upcoming October 24 policy decision meeting is fast approaching. Currently, there is a 98.2 percent market implied probability of an interest rate hike at this meeting.

Expected data releases in the United States this week include retail sales, monthly budget statement, housing starts, and building permits.

The Canadian dollar is currently trading relatively flat against the US dollar. Today’s expected range is 1.2976 – 1.3076.

Source: Bloomberg