For the week of September 22 – 26
It is a quiet start to the week throughout Canada with only one economic release on the schedule. The Bloomberg Nanos Confidence Index will update for the period ending September 19, 2014 after releasing at 58.8 in the previous week. A score above 50 on the index indicates more positive views than negative. South of the border, the Chicago Fed National Activity Index has released at -0.21 for August, below the expected level of 0.33. A negative value in this index suggests below-average growth throughout the economy. Later today, Existing Home Sales are expected to increase by 1.0% on a month over basis for August after a gain of 2.4% in the previous month.
Focus this week throughout Canada falls on the Retail Sales data for July scheduled to release tomorrow. On a month over month basis, Retail Sales are forecast to increase by 0.5%. Excluding auto, Retail Sales are expected to remain unchanged. The next Bank of Canada Rate Announcement is not scheduled until October 22, 2014; however Governor Poloz has continued to stress the importance of consistent economic strength throughout the economy before any rate movement will be considered.
It will be busy throughout the United States this week with major economic data scheduled almost every day. New Home Sales will update on Wednesday with expectations to see an increase of 4.4% on a month over basis throughout August after falling by 2.4% in the previous update. Thursday, Durable Goods Orders are forecast to fall by 18.0% for August following a gain of 22.6% from the previous month. The week will close with an update to second quarter GDP data with expectations to see an increase of 4.6% QoQ. Personal Consumption is also expected to show a gain of 2.9% on Friday.
In the currency markets, the Canadian dollar has fallen against its U.S. counterpart in early trading this morning and has once again pushed above 1.1000 based on broad market movement. With the lack data on the schedule out of Canada for the week, the CAD will be vulnerable to data out of the United States. Moving forward, investors expect the Federal Reserve to take a more aggressive stance before the Bank of Canada which has been weighing on the CAD. If we continue to see strength out of the United States, the CAD may fall further against the USD until the BoC becomes more committed to a hawkish stance on the Canadian economy.
Todays expected range: 1.0962 – 1.1062
Posted by Concentra Financial Markets