Weekly Economic Update

For the week of August 15 to 19

CONCE_000007816956_HiRes_RGBThe Dow Jones Industrial Average closed the week at 18,576, just 40 points shy from an all-time high, and Nasdaq Composite Index edged higher to close at a record. Chinese equities rallied 2.5% overnight after a report said details of an exchange link between Hong Kong and Shenzhen will be announced. Japanese Indexes lowered after Q2 GDP missed expectations at 0.2% vs. consensus of 0.7%, driven by a 0.4% decline in business spending and a 0.3% drag from net exports caused by a stronger yen.

The U.S. Commerce Department on Friday said 8 of 13 major retail sales categories declined, including clothing, groceries, and appliances, but demand for autos showed improvement. Also, the Labor Department reported producer price index dropped in July, the biggest decline since September. In Canada, July existing home sales came in at -1.3% vs. -0.9% prior month. In U.S., August Empire manufacturing missed expectations; it came in at -4.21 vs. 2.00.

In terms of data this week in Canada, we will see data manufacturing sales on Tuesday, and retail sales and CPI data on Friday. In the United States, we expect data for housing starts, CPI, industrial production on Tuesday, U.S. Fed releases minutes from July 26-27 FOMC meeting on Wednesday, and Philadelphia Fed Business outlook on Thursday.

WTI closed at $44.49 per barrel on Friday, prices opened near flat at $44.65 per barrel this morning. OPEC’s president said on August 8th the group will hold informal talks in Algiers next month, while Saudi Arabia signaled on August 11th it is prepared to discuss taking action to stabilize markets. Crude prices have since rallied from the comments, from the close on August 5th at $41.80 per barrel.

The Canadian dollar is currently trading at 1.2927 against USD, slightly up from Friday’s close of 1.2927. Today’s expected range is between 1.2877 – 1.2977.

Source: Bloomberg

Posted by Concentra Financial Markets

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