For the week of January 4 to 8, 2016
Happy New Year!
It’s a quiet first business day of 2016 here in Canada today. The RBC Canadian Manufacturing PMI will be released later this morning for the month of December after a release of 48.6 in November, the first increase since mid-2015. The Bloomberg Nanos Confidence survey will also be released. South of the border, the Markit US Manufacturing PMI will be released with surveyed expectations of 51.1 in December, slightly lower than November’s release of 51.3. Construction spending is expected to increase 0.6% for the month of November and the Institute for Supply Management forecast sits purchasing managers index at 49.0 for December along with business prices paid to remain unchanged at 35.5 on the index.
In the currency markets, CAD has continued to weaken against its USD counterpart starting out the first day of 2016, down 0.5%. Concerns continue to be centered around oil prices and the OPEC production abilities as well as China’s growth outlook.
Todays expected range for USD/CAD: 1.3880-1.3980
For the week ahead:
Canada: Tomorrow we’ll see an update to Industrial Product Prices for the month of November, expecting no change over the month after a decline of 0.5% in October. The prices of raw materials in Canada are expected to have declined 2.5% in November after increasing 0.4% in the month prior. On Wednesday, the International Merchandise Trade deficit is expected to narrow to $2.6 billion for the month of November after October’s $2.76 billion deficit. Exports are expected to have picked up now that the manufacturers have had time to get comfortable with the weaker Canadian dollar. Remember, we saw an all-time record wide deficit in March of 2015 (-$3.6 billion). Last but not least, on Friday the Unemployment rate is expected unchanged at 7.1% for December with a net change in employment positive at 10.0K.
Out of the U.S.: We’ll see a busy day of releases on Wednesday with updates to MBA Mortgage Applications and ADP Employment Change as well as U.S. Trade Balance, Markit US Services and Composite PMIs, ISM Non-Manufacturing Composite, and Factory, Durable and Capital Goods orders. The trade balance deficit is expected to have widened to -$44.1 billion in November. On Friday, Nonfarm payrolls are expected at 200k in December with the unemployment rate remaining unchanged at 5.0%. Wholesale inventories will also be released, expected to have decreased 0.1% in December.
Posted by Concentra Financial Markets