Weekly Economic Update

For the week of September 14 to 18

In Canada this morning the Teranet/National Bank Home Price Index has updated for August. The HPI has increased by 1.0% on a monthly basis and 5.4% on a yearly basis. On the year, prices increased in Toronto and Vancouver by 8.7% and 9.7% respectively while falling in Montreal by 0.5%. Later today, the Bloomberg Nanos Confidence Index will update for the week ending September 11 after falling to 53.3 in the latest update. It will be quiet out of the United States today without an update on the schedule; focus will shift to data set to release later this week.

Headlines in Canada this week include updates to Manufacturing Sales and the Consumer Price Index. Manufacturing Sales are expected to rise by 1.1% in July, slightly lower than the previous gain of 1.2%. On a year-over-year basis, the Consumer Price Index is forecast to increase by 1.3%, still well below the Bank of Canada’s target of 2%. If the data releases as expected, we could see the Bank of Canada hold at the current level of interest rates for a significant period of time. Bank of Canada Governor Poloz continues to stress the focus on the labour market and other key economic data. Focus in the United States falls on tomorrow’s update to Retail Sales followed by the FOMC Rate Decision on Thursday. Markets are still mixed on what the Federal Reserve will do at the announcement but current forecasts are calling for a small rate hike of 0.13% brining the target range to 0.13% – 0.38%.

487806549In the currency markets, the Canadian dollar is slightly up against the USD in early trading this morning at the start of a busy week. Canadian CPI and U.S. Retail Sales will be important, however, focus will fall on Bank of Canada Deputy Governor Cote’s speech scheduled for Wednesday, followed by the Federal Reserve decision on Thursday. The price of oil is down slightly this morning, trading at $44.30 per barrel but having a relatively low impact on the CAD.

Todays expected range: 1.3193 – 1.3293

Source: Bloomberg

Posted by Concentra Financial Markets

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