In Canada this morning, Existing Home Sales will update for November after posting a gain of 0.7% (m/m) in the previous month. Also on the schedule today, the Bloomberg Nanos Confidence Index will update for the week ending December 12, following its latest release of 57.4. A reading above 50 on the Confidence Index indicates net positive views on the economy. In the United States, focus falls on the update to the Empire Manufacturing Index which is expected to rise from 10.16 to 12.00 for December. Industrial Productions are expected to post a gain of 0.7% for November after falling by 0.1% in last month’s update.
Focus throughout the Canadian markets this week falls on updates to the Consumer Price Index and Retail Sales, both scheduled to release on Friday, December 19. The CPI is expected to fall by 0.2% (m/m) for November following an increase of 0.1% in the previous release. On a year-over-year basis, the CPI is forecast to show a gain of 2.2%, beating the Bank of Canada’s target rate of 2.0% for the eighth straight month. Retail Sales are expected to drop by 0.2% for October, after a gain of 0.8% in the latest update. Excluding autos, Retail Sales are expected to increase by 0.2%.
It will be a busy week throughout the United States with multiple important economic releases on the schedule. Housing Starts are expected to rise throughout November with a forecast gain of 3.1% compared to a drop of 2.8% in October. The CPI is expected to drop slightly, by 0.1% following no change in the latest update. Year over year, the CPI is expected to show a gain of 1.4%. The highlight of this week comes on Wednesday with the next FOMC rate decision on the schedule. The rate is expected to remain at 0.25%; however we may see a more aggressive tone out of the Federal Reserve based on the recent strength in economic data.
The Canadian dollar has fallen against the USD in early trading this morning as the exchange pushes towards 1.16. With the price of crude oil continuing its struggle, now hovering around $58 per barrel, it is likely that the CAD will continue to show short term weakness. With the lack of economic data out of Canada today, the CAD will be left vulnerable to releases out of the United States and fluctuating oil prices. The focus of Canadian data falls on Friday with an update to the CPI.
Todays expected range: 1.1550 – 1.1650
Posted by Concentra Financial Markets