Weekly Economic Update

For the week of July 11 to 15

CONCE_000007816956_HiRes_RGBEmployment released weaker than expected in Canada and stronger than expected in the United States at the end of last week. In the United States, Nonfarm payrolls data showed that the U.S. economy added 287,000 jobs in the month of June following an extremely weak posting of a revised 11,000 jobs in May. In Canada, the net employment change was -700 for the month of June, missing expectations of 5,000 significantly. This posting was even weaker than the headline suggested with full-time positions dropping by over 40K.

The upcoming week will include both central bank policy meetings and several notable data releases. Both the Bank of Canada and the Bank of England will be holding monetary policy meetings on Wednesday and Thursday respectively. This will be the first rate meeting for the Bank of England since the Brexit decision and the markets are pricing in a 78 percent chance of a rate cut. In terms of data this week in Canada, we will see housing starts released this morning and Manufacturing Sales on Friday. In the United States we expect data for consumer prices, retail sales, wholesale inventories, PPI, empire manufacturing, industrial production, and University of Michigan Sentiment.

Japan’s Prime Minister Shinzo Abe was re-elected in a convincing fashion, and markets are seeing this as a positive due to his policies aimed toward growth. Upon the news of his re-election, the Topix Index jumped by approximately 3.8 percent.

Oil prices fell when the results of a Baker Hughes Inc. report showed that active rigs in the United States have increased to the highest level in 12 weeks, suggesting that supply may follow. Prices fell by a combined 7.3 percent through last week, but are up by 0.46 percent to $45.62 per barrel this morning. The Canadian dollar is trading down against the U.S. dollar this morning. Today’s expect range is 1.3018 – 1.318.

Source: Bloomberg

Posted by Concentra Financial Markets

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