In Canada this morning, the Bloomberg Nanos Confidence Index will update for the week ending September 25th following the release of 53.2 in the latest update. The Index has been hovering above 53.0 since August 21st, 2015. In the United States, Personal Income has posted a monthly gain of 0.3% in August, falling short of forecasts calling for 0.4% while Personal Spending has increased by 0.4%. Increased spending throughout the United States has helped the economy continue to show signs of strength despite global weakness. Later this morning Pending Home Sales will update for the month of August with forecasts calling for an increase of 0.4%, following a gain of 0.5% from the most recent update.
Focus throughout Canada this week falls on Wednesday’s update to GDP which is expected to increase by 0.2% on a month-over-month basis for July and 0.7% on a year-over-year basis. Focus in the United States will shift to Fridays update to employment data with Nonfarm Payrolls expected to increase by 202K for September and the unemployment rate to remain at 5.1%. Federal Reserve Chair Janet Yellen has stated that they will need to see strength in the labor market before hiking interest rates.
In the currency markets, the Canadian dollar has fallen slightly against the USD as oil prices have fallen by almost 2% this morning, trading at $44.83 per barrel. Due to the quiet schedule of economic data throughout Canada this week, the CAD will be at risk to broad market developments. It is starting to appear less and less likely that the Bank of Canada will cut again over the next 12 months, with the market pricing in only a 14% chance of another cut, falling from an 80% on August 26th. It the U.S continues to release strong economic data, the CAD will struggle to recover and will likely fall further against the USD.
Todays expected range: 1.3360 – 1.3460
Posted by Concentra Financial Markets