For the week of April 25 to 29
Throughout last week the price of oil managed to rise by over 8 percent despite a production freeze failure the Sunday before. Some likely causes were rising fuel use and falling U.S. output. The Energy Information Administration expects global demand of gasoline to increase by 1.4 percent this summer, bringing it to record levels. Oil prices are relatively flat this morning on news that Saudi Arabia will be completing the expansion of a new oil field, which allow for daily production of 12 million barrels of oil, by the end of May. As of now, the price of oil is up by .25 percent to $43.84 per barrel.
Canada closed last week out on a strong note with better-than-expected results from Retail Sales and Consumer Prices data. Retail Sales grew by 0.4 percent after economists expected them to fall by 0.8 percent. Gains were seen in the autos and clothes sectors, among others. Consumer Prices grew by 1.3 percent for March, beating estimates of 1.2 percent growth. The Canadian dollar responded positively to both this data as well as increasing oil prices, appreciating by 1.2 percent throughout the week. This morning, the Canadian dollar is trading relatively flat against its U.S. counterpart. Todays expected range is 1.2613 – 1.2713.
Central banks in the United States and Japan will be holding policy meetings this week and will likely steal most of this weeks attention. Unlike in the United States, there are expectations for additional monetary easing announcements at Japan’s policy meeting. Economists see zero chance of a rate hike by the Fed at this meeting and only a 20 percent chance at the upcoming June meeting. Whether or not there are any changes to policy, the market will be watching for any change in direction expressed in either meeting. The Fed’s meeting takes place on Wednesday and the Bank of Japan’s falls on Thursday.
Other data expected this week includes GDP out of Canada, which will be released on Friday. Surveyed economists expect GDP to have fallen by 0.1 percent for the month of February and to have grown by 1.6 percent on a year-over-year basis. In the United States, data for New Home Sales is out this morning, and is expected to post at 520k, up 1.6 percent since February. Throughout the week we will see postings for Durable Goods Orders, GDP Annualized, Personal Income, and Personal Spending.
Posted by Concentra Financial Markets