For the week of January 2 – 7
Today marks the first day of trading of 2017 for most major markets around the world. 2016 had some large stories including the low Canadian dollar, the election of Donald Trump as the president of the United States, housing market fears, a historic OPEC production deal, and December’s Fed rate hike, among many others. Treasury yields continue to rise in Canada and the United States as inflation prospects remain high.
Despite closing slightly lower on the last trading day of the year, oil prices wrapped up 2016 with the largest yearly gain since 2009. Most of the year’s gains can be attributed to the recent development of a production cut by OPEC and non-OPEC members. WTI and Brent crude prices increased by approximately 45% and 52% respectively during the year . Oil is currently up by 2.22% to $54.91 per barrel.
China posted surprisingly strong data for private manufacturing levels in December, rising to 51.9 from 50.9 a month earlier. Economists had forecasted that December’s data would see a drop to 50.7; However, China’s official PMI actually fell to 51.4 in the same month. China has also introduced a new curb on capital outflows, requiring banks and other entities to report any overseas transaction over a certain value with the goal of reducing illegal activities.
Canadian data this week will include today’s manufacturing PMI as well as international merchandise trade and employment numbers on Friday. In the United States, data is expected for ISM manufacturing today as well as trade balance and employment numbers on Friday.
The Canadian dollar is relatively stable against the US dollar to start the New Year. Today’s expected range is 1.3396 – 1.3496.