Weekly Economic Update

For the week of October 27 to 31

It’s quiet in Canada today with just the Bloomberg Nanos Confidence Index on the economic schedule. The data will release later this morning for the period ending October 24. In the most recent update, the index released at 58.4, the third straight weekly drop and the lowest in 18 months. South of the border, Pending Home Sales will release this morning with monthly and yearly data. On a monthly basis expectations are predicting a 1.0% gain after a prior 1.0% drop. This index is a leading indicator for existing home sales as it tracks signed contracts for existing single-family homes, condos and co-ops that have not yet closed. Also releasing today in the US is the Markit US Services PMI, Markit US Composite PMI and the Dallas Fed Manf. Activity.

With less than a half dozen releases this week’s focus in Canada falls on GDP set to release Friday. Expectations are for Canada’s economy to expand 2.3%. Other releases in Canada this week include Industrial Product Price MoM and Raw Materials Prince Index MoM. Industrial Product Price measuring the change in the price of goods as they leave their place of production and Raw Materials Price Index reflecting prices paid by Canadian manufacturers for key materials.

It is a packed economic schedule south of the border this week; more notable headlines include the Durable Goods Orders, Consumer Confidence Index, MBA Mortgage Applications, Initial Jobless Claims, GDP and on Wednesday the FOMC Rate Decision. Durable Goods Orders for September will be the first report without distortions of July’s spike in aircraft orders and we are expecting a 0.5% increase. Initial Jobless Claims for the week ending October 25 is expected to increase for the second straight week to 285K from 283K. On Wednesday, the FOMC Rate Decision will be released with economists expecting the announcement of the termination of its asset purchases. And finally, GDP is expected to slow to 3.0% compared to the prior quarter growth of 4.6%.

In the currency markets, the Canada dollar is relatively unchanged from Friday’s close, currently hovering around 1.1240. The main Canadian driver this week will be GDP on Friday and prior to that focus will fall on a heavy economic schedule south of the border.

Today’s Expected Range: 1.1195 – 1.1295

Source: Bloomberg

Posted by Concentra Financial Markets

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