Weekly Economic Update

For the week of May 25 to 29

It’s a quiet day out of both the U.S. and Canada today. Only the Bloomberg Nanos Confidence Survey for the week of May 22 is set to be released in Canada and nothing will be released from our southern neighbors given the holiday today. This is also consistent in currency markets with USDCAD flat to Friday’s close.

Although quiet today, things quickly pick up for the week ahead. Headlines throughout Canada start on Wednesday with focus falling on the Bank of Canada’s rate decision announcement. Expectations are for no change to the overnight lending rate of 0.75%. In Bank of Canada Governor Stephen Poloz’s last speech before the May 27 rate decision, he spoke consistently indicating that another rate cut is off the table as the economy is on track to return to full capacity by the end of next year. He did state that “While there’s still a risk that lower oil prices could have a greater impact, the signs we have seen to date lead us to believe that the impact of the shock is proving to be faster than we first expected but not larger…”

On Thursday, the Current Account Balance for the first quarter of 2015 will be released with expectations for it to hit $-18.7B, down from the last release at $-13.9B. In addition, Industrial Product and Raw Material prices for April are forecast to fall -0.1% and increase 1.6%, respectively. Last but not least, we’ll see an update to GDP on Thursday. Expectations are for the economy to grow 0.2% in March after no growth in February, 2.1% from the same time last year, and just 0.3% for the first quarter of 2015.

Throughout the United States this week, heavy data falls on Tuesday with a slew of releases. Durable Goods Orders are expected to have declined 0.5% in April but excluding transportation orders are expected to have increased 0.3% which is flat to March. Capital Goods Orders and Shipments are also both expected at 0.3% for April. New Home Sales should have increased to 505,000 over April, up 20K from March. Another important release on Tuesday includes the Conference Board’s Consumer Confidence index for May. Economists are expecting the index to have dropped slightly from last month’s four-month low after U.S. residents expressed concerns of the slow pace in payroll increases over March and higher gasoline prices.

We see a break on Wednesday, just in time for Thursday’s schedule of Jobless and Continuing Claims along with Pending Home Sales and then Friday we see first quarter GDP, Personal Consumption, and both the Chicago Purchasing Manager and the University of Michigan’s Consumer Sentiment indices.



Source: Bloomberg

Posted by Concentra Financial Markets

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