Weekly Economic Update

For the week of February 17 to 20

487806549In Canada this morning, International Securities Transactions are scheduled to update for December after releasing at 4.29B in November. Existing Home Sales will release for January following a decrease of 5.8% in February. Later this morning an update will be made to the Bloomberg Nanos Confidence Index for the week ending February 13, 2015, after falling to 54.6 in last week’s update. In the United States, Empire Manufacturing is expected to fall from 9.95 in January to 8.00 in February. Also on the schedule, the NAHB Housing Market Index is forecast to rise to 58 for February, up from 57 in the latest release.

Focus this week throughout Canada falls on the update to Retails Sales scheduled for Friday. Sales are forecast to fall by 0.4% m/m for December, following an increase of 0.4% in November. Excluding autos, sales are expected to drop by 0.8% compared to an increase of 0.7% last month. Headlines throughout the United States include updates to Housing Starts, the Leading Index, and Existing Homes Sales. Housing Starts are expected to fall by 1.7% m/m for January following a gain of 4.4% in December while existing home sales are also expected to fall with a drop of 0.8% for January. The Leading Index is forecast to release at a slight gain of 0.3% for January, following an increase of 0.3% in the latest update.

In the currency market, the Canadian dollar has shown strength against its U.S. counterpart in trading today, gaining close to one cent in the exchange, now trading below 1.2375 for the first time since early February. The price of oil is now trading close to $53 per barrel, leading the gain in the Canadian dollar following the long weekend. We are now just over two weeks away until the next Bank of Canada Rate Announcement, and although the price of oil has rebounded slightly, we may see Governor Poloz maintain his dovish tone with the overall economy continuing to show signs of weakness.

Todays expected range: 1.2320 – 1.2420

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