Weekly Economic Update

For the week of May 14 – 18.

April’s net change in employment positions declined by 1.1K, compared to expectations of a 20.0K increase. Details show that part-time positions fell by 30.0K, while more desirable full-time jobs rose by 28.8K (higher than was expected). Despite the slight drop in jobs, Canada’s unemployment rate remained at 5.8 percent. Hourly wage figures in Canada were up by 3.6 percent on a year-over-year basis. Losses were primarily focused in the construction industry.

It will be a relatively busy week for data in Canada and the United States. Canadian data releases this week will include manufacturing sales, international securities transactions, retail sales and consumer prices. In the United States we will see data released for empire manufacturing, retail sales, housing starts, building permits and others.

The Canadian dollar gave back all of its early morning strength against the US dollar upon the release of disappointing employment data. The Loonie ended the day down 0.27 percent against the US dollar. Today’s expected range is 1.2712 – 1.2812.

Source: Bloomberg

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Weekly Economic Update

For the week of May 7 – 11.

The US economy added 164k jobs in April,  increasing from March’s figure of 135k. Although average hourly earnings increased 0.1 percent from March and 2.6 percent from a year earlier, the earnings were lower than expected. The unemployment rate was also lower than expected, falling to 3.9 percent from the 4.1 percent posted in March. This is the first time the unemployment rate has fallen below 4 percent since 2000.

According to the Ivey Purchasing Managers Index, business activity in Canada picked up in April. April’s monthly index on business activity rose to 71.5 from 59.8 in March, dictating that business numbers improved more than they’ve deteriorated. With April’s release, this would push the 3 month average to 63.6, up from 58.2 in March.

Scheduled economic data releases in Canada this week include housing starts, building permits, the new house pricing index, and the employment report. After increasing 32.3k in March, hiring is expected to have slowed in April to 19.6k. The unemployment rate is expected to remain unchanged at 5.8 percent. Major releases in the US this week include PPI, CPI, the import price index and the University of Michigan Sentiment gauge. After an unexpected monthly decline of 0.1 percent in March, CPI is expected to rebound in April at a 0.3 percent pace.

The Canadian dollar is trading slightly down from Friday’s market close. Today’s expected trading range is 1.284 – 1.294.

Source: Bloomberg

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Weekly Economic Update

For the week of April 30 – May 4.

US first quarter GDP (first print) came in at 2.3 percent, higher than increased expectations of 2.0 percent. The increase in the first quarter reflects positive contributions from non-residential fixed investment, personal consumption expenditures, exports, private inventory investment, federal government spending, and state and local government spending. However, personal consumption expenditures, exports, and state and local government spending all decelerated, causing overall deceleration in first quarter GDP. As a result, personal consumption decelerated to 1.1 percent in the first quarter from 4.0 percent.

The University of Michigan’s final print of its April sentiment index showed a decrease to 98.8 from 101.4 in March. However, this was higher than consensus expectations of 98.0, and also higher than the preliminary reading of 97.8. The current conditions gauge, which measures Americans’ perceptions of their finances, fell to 114.9 from the record 121.2 in the prior month. The expectations measure also eased to 88.4 from 88.8.

Canadian releases this week include manufacturing, international merchandise trade, and February GDP. After declining 0.1 percent month-over-month in January, February GDP is expected to bounce back into positive territory, increasing 0.3 percent. On a yearly basis, GDP is expected to come in at 2.8 percent. US releases this week include manufacturing, personal spending and income, home figures, and the employment report. The Fed is also scheduled to announce their rate decision this week. Consensus expectations are for the Fed to leave rates unchanged at 1.50-1.75 percent at this meeting.

The Canadian dollar is trading slightly down from Friday’s market close. Today’s expected trading range is 1.2818 – 1.2918.

Source: Bloomberg

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Weekly Economic Update

For the week of April 23 – 27

Canadian headline inflation increased 2.3 percent year-over-year in March, which was 0.1 percent lower than consensus expectations but 0.1 percent higher than February’s figure. The average of the core measures came in at 2.00 percent, just shy of the 2.03 percent recorded in February. On a monthly basis, headline inflation was up 0.3 percent. The largest upside contributor to the monthly figure was the recreation and education category, adding 0.22 percentage points while the largest downside contributor was the household operations category, subtracting 0.22 percentage points.

Canadian retail sales matched consensus expectations in February, increasing 0.4 percent month-over-month to $49.8 billion. However, excluding autos, sales were flat to January’s figures with the new car dealers category driving sales for the month of February, contributing 0.39 percentage points to overall sales which happen to be the largest upside contributor to overall retail sales. The largest downside contributor was the gas stations categories, subtracting 0.10 percentages points. Of the 11 subsectors of retail sales tracked by Statistics Canada, four experienced an increase. These four categories represent 47 percent of all retail trade.

Scheduled data releases this week for Canada will be very light. The only major scheduled release this week is the February wholesale trade sales figure. Consensus expectations are for sales to increase by 0.7 percent after January’s 0.1 percent increase. There will be a lot more data releases in the US. Scheduled releases include housing figures, manufacturing numbers, sentiment gauges and GDP. The first print of first quarter GDP is expected to come in at an annualized rate of 2.0 percent, down from the final print of fourth quarter GDP of 2.9 percent.

The Canadian dollar is down a bit more against the US dollar from Friday’s market close. The loonie is down about a cent from Friday morning after Canadian CPI figures came in slightly lower than forecast. Today’s expected trading range is 1.2730 – 1.2830.

Source: Bloomberg

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Weekly Economic Update

For the week of April 16-20.

After a 6.5 percent month-over-month decline in February, Canadian existing home sales increased 1.3 percent in March. Details of the Canadian Real Estate Association’s most recent release show that while existing home sales in Toronto rose 2.1 percent, existing home sales in Vancouver declined 8.6 percent. The Canada MLS home price benchmark rose 1.16 percent month-over-month in March, while the average home price fell 1.9 percent month-over-month (-10.4 percent on a year-over-year basis).

The University of Michigan Sentiment gauge declined more than expected according to April’s preliminary figures, falling to 97.8 from 101.4 – expectations were for a 100.4 reading. According to the survey, the small decline was widely shared by all age and income subgroups across all US regions. The report noted confidence still remains relatively high, despite the recent losses that were mainly due to concerns regarding the potential impact of Trump’s trade policies on the economy.

This week, the Bank of Canada will meet and announce their rate decision. Consensus expectations among economists are for the Bank to hold its target for the overnight rate steady at 1.25 percent. According to OIS trading during last Wednesday’s bank meeting,  the current implied probabilities of a rate hike is 19 percent. Other scheduled releases this week for Canada include: international securities transactions, manufacturing sales, retails sales and CPI. Major scheduled releases this week for the US include: various manufacturing figures, retail sales, housing starts, building permits and the leading indicators index.

The Canadian dollar is trading at similar levels to the US dollar from Friday’s market close. Today’s expected trading range is 1.2555 – 1.2655.

Source: Bloomberg

 

 

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