For the week of November 30 to December 4
We will see two scheduled releases today in Canada. The Current Account Balance for the third quarter of 2015 is forecast to narrow to -$15.20b from second quarter’s deficit of -$17.40b on expectations that exports have picked up due to the weaker Canadian dollar. The weekly Bloomberg Nanos Confidence survey will also be released for the week ending November 27 with results expecting to land close to last week’s 57.7 reading.
South of the border, we’ll see a released to three regional manufacturing outlook surveys today. The ISM Milwaukee Purchasers Manufacturing Index will be released for the month of November, expecting to increase up to 48 from 46.6, indicating purchasing at manufacturing, construction and/or services firms continues on an upward trend. The Chicago Purchasing Manager, also for the month of November, is expected to slow slightly to 54.0 after October’s positive reverse from a downward trend (October swung up to 56.2 from 48.7 in September). Lastly, the Dallas Fed Texas Manufacturing Outlook Survey is expected at-10.0, slightly less weak than October’s release as the negative impact of lower energy prices and strong USD continue to weigh heavily on the area. Later today we’ll also see a release to Pending Home Sales in October, expected up 1.0% after a 2.3% drop in the previous month and up 4.5% on a year-over-year basis.
In the currency markets, CAD has continued to weaken against its USD counterpart heading into month-end. Oil prices remain relatively unchanged with WTI slightly up, at $42.01/bbl. The next OPEC meeting is set for December 4 but production is expected to remain high. The Bank of Canada meets on Wednesday with its rate decision. The market is currently pricing in only a 1% chance of another rate cut however a more dovish outlook from the BoC still puts CAD at risk for further weakness into year end.
Todays expected range for USDCAD: 1.3320-1.3420
For the week ahead:
We’ll see a number of important releases for the week ahead out of both Canada and the U.S.
Canada: Tomorrow, we’ll see domestic GDP released with expectations of 0% growth over the month of September and just 0.4% year-over-year. Annualized third quarter GDP is expected stronger at 2.3%. On Wednesday, the Bank of Canada will release its policy statement, with the overnight rate expected to remain unchanged. Rounding out the week, Canadian employment for the month of November is expected to decrease by 12.5K jobs, with the unemployment rate remaining unchanged at 7.0%.
Out of the U.S.: Tomorrow the ISM Manufacturing index will be released for the month of November expecting to be released slightly up at 50.5 (vs 50.1 in October). On Thursday, Factory, Durable and Capital goods orders will be released for the month of October. Change in Nonfarm Payrolls for the month of November will be released Friday with expectations of a 200K increase and the unemployment rate to remain unchanged at 5.0%.
Posted by Concentra Financial Markets