In Canada this morning, the Bloomberg Nanos Confidence Index will update for the period ending August 1st, 2014. The index most recently measured in at 59.7, with a score above 50 suggesting net positive economic views. South of the border, the Markit US Services PMI for July is expected to release at 60.8, down slightly from 61.0 in the previous period. Factory Orders are forecast to increase by 0.6% for the June period after a drop of 0.5% in the latest release.
Focus this week throughout Canada falls on the employment data scheduled to release Friday, August 8th. The Unemployment Rate is expected to stay unchanged at 7.1% while the Net Change in Employment is expected to show a gain of 22.0K for the July period. The job market in Canada remains a key indicator for the Bank of Canada and Governor Poloz to consider when they hold their monthly rate meetings. Governor Poloz has maintained a neutral view of the Canadian economy; however, with continued strength in employment numbers, we could see him shift to a more aggressive tone.
It is a light week throughout the United States in terms of economic data. Headlines will include updates to the Trade Balance and Wholesale Inventories. The Trade Balance is expected to release at -$44.8B for June, slightly lower than the previous release of -$44.4B. Wholesale Inventories are forecast to increase by 0.7% on a month over month basis for June, following a gain of 0.5% in the latest release.
In the currency markets, the Canadian dollar has fallen against its U.S. counterpart in early trading this morning following the release of weak economic data out of China combined with low equity markets and dropping oil prices. The CAD has lost 3% since its July 3rd high. Focus for the CAD this week falls on Friday’s employment data out of Canada. Strong employment data would increase investor confidence leading up to the next Bank of Canada meeting, providing strength to the Canadian dollar, while weak employment data could lead to the currency falling further against the USD.
Todays expected range: 1.0905 – 1.1005
Posted by Concentra Financial Markets