Weekly Economic Update

471920189International Securities Transactions are scheduled to update for November this morning after releasing at 9.53B in the latest update. Later this morning there will also be an update to the Bloomberg Nanos Confidence Index for the period ending January 16. It will be a quiet day out of the United States without any data on the schedule. Focus will shift to releases scheduled for later this week. The Update to the CPI on Friday released as expected with a drop of 0.4% on a month over month basis. This was the largest drop in six years which was caused by the recent slump in energy pricing.

It is an important week in the Canadian economy with the next Bank of Canada rate decision on the schedule for Wednesday the 21st. Given the recent economic data out of the country and the price of oil, it is expected to see Bank of Canada Governor Poloz remain neutral once again. With the current economic outlook, some investors aren’t expecting rates to increase until 2016. Later this week, focus will shift to an update to the CPI and Retail Sales scheduled to release on Friday.

Headlines this week out of the United States include updates to Housing Starts, Home Sales, and the Leading Index. Housing Starts are expected to post an increase of 1.2% for December after falling by 1.6% in the latest update while Existing Home Sales are also expected to post a gain for December of 3.0%. The Leading Index is forecast to rise by 0.4% for December after an increase of 0.6% in November.

The Canadian dollar is unchanged in early trading against its U.S. counterpart this morning. Focus shifts to the next Bank of Canada announcement scheduled for Wednesday, as the price of oil has consistently traded between $45 and $50 per barrel over the last week. The key in the rate announcement will be how the BOC assess the current oil situation. They have mentioned in previous announcement that the drop in oil was not a concern but they may change their tone as the price has remained low. The EUR has increased above its low but markets are still expecting some form of stimulus to come from the ECB.

Todays expected range: 1.1940 – 1.2040

Source: Bloomberg

Posted by Concentra Financial Markets

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