Weekly Economic Update

For the week of May 2 to 6

118353675OPEC producers boosted their production to 33.217 million barrels of oil per day, up 484,000 barrels through the month of April. This is the highest monthly amount since 1989. This monthly gain includes recent increases in Iraq’s production, which climbed to 3.36 million barrels in April, up from 3.29 million barrels in March. Oil prices rose over 20 percent throughout the month of April. However, prices are starting the month relatively flat at $45.73 per barrel. The Canadian dollar is strengthening against its United States counterpart this morning. Todays expected range is 1.2474 – 1.2574.

More data from China is suggesting that additional stimulus may not be needed in the near future. The Manufacturing Purchasing Managers Index posted above 50 in April for the second month in a row. The posting of 50.1 suggests that the economy may be recovering or at least stabilizing. This stabilizing data, along with existing financial stimulus working through the economy may be enough to keep additional stimulus at bat in the short term.

Canada’s GDP fell by 0.1 percent for the month of February, as was more or less expected. This decline follows four straight months of GDP growth, including 0.6 percent in January. Low oil prices are being seen as hindering Canadian growth, as is evidenced by a 0.8 percent drop in February’s mining, quarrying and oil and gas extraction category. Strong growth is still expected for the first quarter on an overall basis.

RBC Canadian Manufacturing PMI is releasing out of Canada today following a posting of 51.5 in March. In the United States, the ISM Manufacturing Index will be posting data for April. A posting of 51.4 is expected, following 51.8 in March. Because this number is above 50, it signals continued expansion. Also out of the United States this morning is the Markit US Manufacturing PMI, which is expected to post at 50.8 for the month of April.

For the rest of the week, Canada will be releasing employment data on Friday, and is expected to add around 5,000 jobs. The unemployment rate is expected to jump up a notch to 7.2 percent. In the United States, data will be released for Factory Orders, Durable Goods Orders, and Nonfarm Payrolls. Fridays Nonfarm release is expected to leave the unemployment rate in the United States at 5.0%

Source: Bloomberg

Posted by Concentra Financial Markets

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