Weekly Economic Update

For the week of February 11 – 15.

January employment figures out of Canada blew expectations out of the water on Friday. The net change in employment was more than thirteen times what economists had expected, releasing at 66.8K. 30.9K were full-time positions, while the remaining were part-time positions. The unemployment rate ticked up to 5.8 percent from a previous reading of 5.6 percent. Hourly wage rate growth exceeded expectations by increasing to 1.8 percent, higher than December’s growth level of 1.5 percent.

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Housing starts data also released for the month of January in Canada on Friday. Starts were slightly higher than expectations at a level of 208.0K. Single detached housing starts were down by 10 percent, while multiple starts were up by approximately one percent. Housing starts in Ontario were up by approximately 6.8 percent.

Data released for Canada this week will include international merchandise trade, manufacturing sales and others. Releases out of the United States will include consumer prices, retail sales, empire manufacturing and others.

The Canadian dollar is currently trading flat against the US dollar. Today’s expected range is 1.3229 – 1.3329.

Source: Bloomberg

Weekly Economic Update

For the week of February 4 – 8. 

Nonfarm payrolls in the United States released at 304K for the month of January, nearly double surpassing expectations for the month. This is also a significant jump from the previous months revised reading of 222K (revised down sharply from 312K). Despite the beat on this headline posting, hourly earnings growth came in at 0.1 percent on a month-over-month, significantly shy of the expected 0.3 percent. The unemployment rate ticked slightly higher to 4.0 percent from the previous reading of 3.9 percent. As a result, the higher unemployment rate has been greatly impacted by the government shutdown in the United States.

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ISM manufacturing for January in the United States posted at 56.6, surpassing the expected 54.0, and pushing ahead of the previous month’s reading of 54.1. Prices paid dropped from 54.9 to 49.6, while new orders jumped to 58.2 from 51.1. Based on January’s data, the manufacturing industry appears to be unaffected by the ongoing trade war between the United States and China.

The Canadian dollar is currently trading relatively flat against the US dollar this morning. Today’s expected range is 1.3053 – 1.3153.

Source: Bloomberg

Weekly Economic Update

For the week of January 28 – February 1.

It was a slow end for data last week with no releases out of Canada on Friday. United States experienced a postponement of releases due to government shutdown of durable goods and new home sales. The lack of data left investors little to digest outside of trade, global events, and government shutdown discussion.

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The only notable release for Canada this week is GDP. November GDP figures for the country are expected to be released on Thursday following a previous growth posting of 0.3 percent on a month-over-month basis and 2.2 percent on a year-over-year basis, which will give markets something to look forward to.

Expected data releases in the United States this week include postings for wholesale inventories, ADP employment, annualized GDP, personal spending and income, nonfarm payrolls, ISM manufacturing and construction spending. Depending on the status of the government shutdown in the United States, we could see more or less than the anticipated amount. In addition to these releases, the Fed will be holding a policy decision meeting on Wednesday where the expected decision will be “no change”.

The Canadian dollar is currently trading down against the US dollar. Today’s expected range is 1.3185 – 1.3285.

Source: Bloomberg

Weekly Economic Update

For the week of January 21 – 25.

Consumer prices in Canada beat expectations for the month of December, with growth coming in at -0.1 percent on a month-over-month basis instead of the -0.4 percent growth hat was expected by economists. On a year-over-year basis, growth levels jumped to 2.0 percent from 1.7 percent a month prior. Expectations were for this growth level to remain at 1.7 percent in December. A great deal of the December’s strength stemmed from an increase in airfares (up 22 percent). Despite a stronger posting on a headline basis, many are seeing the underlying details are not strong enough to drastically sway the Bank of Canada’s hand.

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It will be a quiet day for data today in both Canada and the United States. Data releases in Canada this week include the weekly update on Bloomberg Nanos Confidence, wholesale trade sales, manufacturing sales and retail sales (all for the month of November). Data releases in the United States include releases for existing home sales, wholesale inventories, durable goods orders and new home sales.

The Canadian dollar is currently trading down against the US dollar. Today’s expected range is 1.3242 – 1.3342.

Source: Bloomberg

Weekly Economic Update

For the week of January 14 – 18

It will be a very quiet start to the week for Canadian data. However, Friday includes big releases such as consumer prices data, and an update on international securities transactions. Data releases in the United States this week include empire manufacturing, retail sales, housing starts, building permits, industrial production and U. of Mich. Sentiment. Prices are also expected to have dropped by 0.3 percent on a month-over-month basis in December after falling by 0.4 percent the month before. On a year-over-year basis, the growth rate of 1.7 percent seen in November is expected to remain through December.

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Consumer prices in the United States for the month of December posted almost entirely in line with expectations. On a headline basis, prices dropped by 0.1 and increased by 1.9 percent on a month-over-month and year-over-year basis. This is the first drop in headline month-over-month growth for this indicator since March of 2018. When excluding food and energy prices, growth levels were closer to 0.2 and 2.2 percent respectively. The headline figures were largely weighed down by falling energy prices, as is apparent based on the above numbers.

The Canadian dollar is currently trading down against the US dollar. Today’s expected range is 1.3233 – 1.3333.

Source: Bloomberg

Weekly Economic Update

For the week of January 7 – 11

Markets continue to react in anticipation of news from ongoing trade conversations between the United States and China. The United States has mentioned the conversations have been going well over the past couple of days, and the two countries should be able to reach what they call a “reasonable” deal. A deal between the two countries would come as a great relief to most, especially following the negative release by Apple, who pointed a finger primarily at China for recent weakness in sales figures.

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The President of the United States Donald Trump will be addressing American citizens today with the hopes of convincing many on the dire need of a border wall between the United States and Mexico. The lack of funding for the wall over the past two weeks (approximately 5 billion dollars) has led to a partial government shutdown in the United States. Trump has threatened this shutdown could continue to last months, or even years.

Canadian markets will see a release for international merchandise trade this morning, and housing starts figures on Wednesday.

The Canadian dollar is currently trading up against the US dollar. Today’s expected range is 1.3230 – 1.3330.

Source: Bloomberg

Weekly Economic Update

For Week of December 31 – January 4

Another slow week for data is expected out of Canada this week. Despite not having many indicators releasing data, we are still expecting to see updated employment numbers on Friday. December employment numbers are expected to show an increase of 10.0K positions after remarkable 94.1K positions were added a month earlier. The unemployment rate is expected to tick slightly higher to a level of 5.7 percent from 5.6 percent in the previous reading.

In the United States, we are expecting to see a bit more data this week including releases for wholesale inventories, new home sales, ADP employment change, ISM manufacturing, construction spending and finally nonfarm payrolls. Nonfarm payrolls for December are expected to show an increase of 180K positions after a disappointing 155K a month earlier. The unemployment rate is expected to remain at a level of 3.7 percent.

There are talks of a potential meeting being set up between the President of the United States Donald Trump and Fed Chair Jerome Powell. Although many think a meeting such as this could ease tensions between the two, many others are warning Powell it may not be a good idea. A meeting between the two could give investors the impression that the Fed is not as independent as originally thought.

The Canadian dollar is currently trading up against the US dollar. Todays expected range is 1.3575 – 1.3675.

Weekly Economic Update

For the week of December 17 – 21.

Friday started on a negative tone with the release of disappointing industrial production and retail sales data out of China. Industrial production came in below consensus at 5.4 percent year-over-year, vs. consensus and previous of 5.9 percent. Retail sales came in at 8.1 percent year-over-year, vs. consensus of 8.8 percent and previous of 8.6 percent, which is the weakest pace since 2003. In Europe, both France and Germany also released weak PMI numbers that were below expectations.

November retail sales in the United States rose 0.2 percent, beating expectations of 0.1 percent, while retail sales ex-auto dealers, building materials and gasoline stations rose 0.6 percent in November. Nine out of thirteen retail categories rose for the month of November, while eleven categories contributed to the retail sales growth in August. Unfortunately, the decent United States retail sales data wasn’t enough to offset the sluggish market sentiment.

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Data releases in Canada this week include existing home sales, manufacturing, consumer price index, retail sales and GDP data. Releases out of the United States this week include housing starts, existing home sales, consumer spending, personal incomes, durable goods orders, GDP, and University of Michigan sentiment readings. Although the markets are still not fully priced for a hike, the Federal Reserve is forecast to increase the overnight target range by another 25bps at the conclusion of the Federal Open Market Committee on Wednesday. Attention will be on the Federal Reserve statements, particularly on neutral rates and inflation forecasts.

Both US and Canada government yields are trading flat to 1bps lower with S&P futures lower (-7.3). The Canadian dollar is trading flat against the US dollar this morning, today’s expected range is 1.3334 – 1.3434.

Source: Bloomberg

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