For the week of February 6 – 11
After a relatively slow month for data in Canada, we will see a pick-up in releases this week. Data will be released for international merchandise trade, building permits, housing starts, and employment. Markets will be keen to see how the Canadian economy will follow up in January to the 46.1K increase in new positions we saw in December. In the United States this week, releases are expected for the trade balance, wholesale inventories, and University of Michigan sentiment.
Headline non-farm payrolls data was dulled by a weaker than expected posting for the unemployment rate and hourly earnings on a month-over-month and year-over-year basis. The U.S. economy added 227K new positions in January, beating expectations by nearly 50K and rising 70K from December. However, the unemployment rate ticked up to 4.8% from 4.7%, and hourly earnings growth dropped to 2.5% on a year-over-year basis from 2.9% in December. The U.S. dollar went from gains to losses against the Canadian dollar on release of these figures.
Daniel Atkinson, Head of the oil industry and markets division at the International Energy Administration expressed his belief that oil prices will not likely reach a level of $65 per barrel any time soon, even with OPEC’s recent production cut. Mention was made of increasing prices leading to a bump in U.S. shale production which once again brings the supply side of the equation higher. Despite this somber outlook for the price of oil, Atkinson believes that compliance by OPEC members has been solid. Oil prices are currently up by a modest .17%. The Canadian dollar is down against the U.S. dollar this morning. Today’s expected range is 1.2994 – 1.3094.