Weekly Economic Update

For the week of October 24 to 28

The Canadian dollar was hit hard on retail sales that significantly missed expectations as well as consumer prices that were nothing to write home about. Retail sales fell by 0.1 percent in the month of August while July’s sales were revised downward to a 0.2 percent drop. Sales fell in seven of eleven categories suggesting that this drop was broad based. Headline consumer prices missed expectations both month-over-month and year-over-year, growing by 0.1 and 1.3 percent respectively. However, core prices fell in line with what economist had forecasted. Inflation ran the highest in New Brunswick and Newfoundland/Labrador.

CONCE_000007816956_HiRes_RGBOil prices were volatile on Friday but ended the day up as Russia’s oil minister confirmed talk by President Vladimir Putin that the country would be willing to curb production in line with OPEC. However, further uncertainty was thrown into the OPEC production equation when Iraq announced that it believes it should not have to participate in any cuts. The price of oil is down by approximately 1.34 percent this morning. The Canadian dollar is relatively flat against the US dollar this morning following Friday’s weak performance. Todays expected range is 1.3297 – 1.3397.

A manufacturing and services PMI indicator posted at its highest level this year in Europe. The indicator increased from 52.6 to 53. 7 in October. Further strength such as this is likely to bring the idea of a tapering of the quantitative easing program back into light by both investors and the European Central Bank. Leading the charge in this posting was Germany, with particularly strong numbers in factory output.

It will be a quiet week for data in Canada, with no major posts after Monday until Monday of next week. In the United States, releases are expected for the Consumer Confidence Index, Wholesale Inventories, New Home Sales, Durable Goods Orders, GDP, and U. of Mich. Sentiment.

Source: Bloomberg

Posted by Concentra Financial Markets

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