For the week of January 9 – 14
It will be a quiet week for data in Canada with the only exceptions being housing starts and building permits, which are set to release January 10. December housing starts will follow November’s posting of 184k, and building permits for November will be following October’s posting of 8.7%. The United States will see more action this week with releases expected for wholesale inventories, PPI final demand, retail sales, University of Michigan sentiment, and the monthly budget statement.
Both the Canadian and U.S. economies were pleased with the employment numbers released on Friday. Canada added nearly 54K new positions, consisting of 81.3k full time positions (offset by a loss in part-time positions). The U.S. added fewer than expected on the surface (156k vs. 175k) but November’s numbers were revised upward by 26k positions. In addition, hourly earnings jumped 0.4% on a month-over-month basis, bringing the year-over-year growth to 2.9%. Although the U.S. dollar ended the day up on the Canadian dollar, losses narrowed upon release of employment data.
Three individuals – seen as likely candidates to head the Federal Reserve if Janet Yellen were to be replaced at the end of her term – are under the impression that monetary policy has been too accommodating, and if they were the leader rates would have been increased earlier and would be higher today. They believe that the Fed has been keeping rates low to solve problems that cannot be solved with monetary stimulus. Despite these comments, one of the individuals, Glenn Hubbard, believes the Fed should continue to wait, to see what policies are implemented by Donald Trump.
Oil prices are down by 1.98 % this morning after three straight days of gains. Losses in oil prices are being attributed to an uptick in U.S. drilling activities. The Canadian dollar is sharing in oils weakness, and is currently down against the U.S. dollar. Today’s expected range is 1.3217 – 1.3317.