Weekly Economic Update

For the week of June 20 to 24

iStock_000010139178_LargeJapan’s export numbers remain weak, falling for an eighth straight month in May. In fact, exports are down 11.3 percent since a year earlier (expectations were for a lesser 10 percent drop). Likely hurting exports is the recent strength of the Yen, which causes Japanese products to appear less appealing to international importers. The yen has appreciated by approximately 15 percent against the U.S. dollar this year.

Consumer prices in Canada slowed in the month of May according to data released on Friday. An appreciating Loonie is likely a large factor in this weaker-than-expected growth. Economists were expecting 1.6 percent year-over-year growth and a posting of a lesser 1.5 percent was seen. Prices of food and gasoline both saw marked decreases in growth from prior months. Core CPI growth on a year-over-year basis for the month of May was 2.1 percent.

The price of oil is slowly taking back some of last week’s losses. After trading up by 3.83 percent throughout the day on Friday oil prices are currently up another 1.77 percent to $48.83 per barrel. A weakening U.S. dollar is a large influencer in this turn around in prices. The Canadian dollar is trading up against the U.S. dollar this morning after doing the same at the end of last week. Today’s expected range is 1.2756 – 1.2856.

There is little data expected out of Canada this week, with the lone market moving releases being Retail Sales on Wednesday. In the United States this week, releases are expected for Durable Goods and University of Michigan Sentiment. The headline this week will be the Brexit decision which is expected to occur on Thursday. The value of the Pound rose along with the price of sterling as a Brexit poll on Friday showed the “stay” side once again in the lead. Although the markets saw this as a positive sign, volatility will likely remain high leading up the final decision on June 23.

Source: Bloomberg

Posted by Concentra Financial Markets

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