For the week of July 4-7.
The amount of oil produced by members of OPEC countries moved in an undesirable direction for the month of June. Production levels reached their highest level of the year thus far, (260,000 barrels higher than they were seen in May) as countries such as Libya and Nigeria continued to ramp up their levels. Libya and Nigeria are currently exempt from the production cut agreement reached by the organization. Increases from these two countries made up half of the build, while Saudi Arabia bumped up production by approximately 90,000 barrels. Oil prices are currently down by .21 percent after rising for eight straight trading days.
Markets have also been disturbed after North Korea successfully tested an intercontinental ballistic missile over the weekend, landing in Japanese waters. Concern was amplified as experts determined the missile would likely have the capability of reaching Alaska.
Business sentiment levels appear to be on the rise as the Bank of Canada claims the measure is at its highest level since 2011.
Data releases expected out of Canada this week will include building permits and employment numbers. In the United States, releases are expected for ADP employment change, trade balance, non-farm payrolls, and the unemployment rate.
The Canadian dollar is currently trading up against the US dollar. Today’s expected range is 1.2927 – 1.3027.
For the week of May 29 – June 2.
Data this week will include releases for the raw materials price index, Canadian manufacturing, and international merchandise trade. These results are expected to release at 0.3 percent, 4.2 percent, and 2.9 percent. In the United States we will see data for personal income and spending, ADP employment changes, ISM manufacturing, trade balance, and employment figures. Non-farm payrolls are expected to show that 185,000 new positions were added to the United States economy, decreasing from the 211,000 in April.
Annualized quarter-over-quarter US GDP came out stronger than expected in the second reading of the first quarter, posting at 1.2 percent. In addition to consumer spending, business spending increased as well.
Oil prices showed modest strength on Friday after being pushed significantly lower on Thursday upon the release of OPEC’s production cut extension. Thursday ended with pricing decreasing by nearly 5 percent, but regained approximately 1.84 percent to close the week out on Friday.
The Canadian dollar is trading relatively flat against the US dollar this morning. Today’s expected range is 1.3401 – 1.3501.
For the week of May 22 – 26.
It will be a slow week for data in Canada outside of the Bank of Canada’s May 24 rate announcement; the only notable release will be coming from wholesale trades and the CFIB business barometer. As of today the market interest rate sits very low at 2 percent. Despite little chance of movement, investors will be keen to hear members discuss their view of the Canadian economy. Releases out of the United States this week will consist of manufacturing PMI, new home sales, existing home sales, wholesale inventories, GDP, durable goods orders, and University of Michigan Sentiment.
As of this morning, oil is down by approximately 0.12 percent. As investors are eagerly awaiting Thursday’s OPEC meeting in Vienna, a failure to reach an agreement on an extension will follow a substantial fall in oil prices later this week. There has been further detail on the proposed cut extension. Countries such as Saudi Arabia, Russia, Iraq, and Mexico have confirmed that they would back a nine month extension.
Wholesale trade sales in Canada surpassed expectations in March, growing by 0.9 percent on a month-over-month-over-month basis instead of the expected 0.8 percent. In addition to expected growth for March, February’s growth was revised from -0.2 percent upward to 0.3 percent. Sales increased by 0.6 percent in volume terms. Inventories were down by 0.3 percent.
Today’s expected range is 1.3416 – 1.3516.
For the week of May 15 – 19.
Canadian data releases for the week include manufacturing sales, international securities transactions, consumer prices, and retail sales. March retail sales figures are expected to have grown by 0.3 percent after falling by twice that amount in February. Excluding autos, sales grew by 0.2 percent. Consumer prices for April are expected to have grown by 0.6 percent on a month-over-month basis and 1.8 percent on a year-over-year basis. Releases out of the United States this week include empire manufacturing, housing starts, and industrial production.
Although United States reported growth in consumer prices and retail sales last Friday, equities and bond yields were down for the majority of the day. Despite both measures showing positive growth on a month-over-month basis, retails sales fell short of expectations. Consumer prices did the same after exclusion of the more volatile food and energy prices.
Oil prices are surging this morning on statements by Russia and Saudi Arabia, indicating an additional 9 month extension of production cuts. This extension is greater than investors were anticipating. Oil ministers for the two countries believe this extension is necessary to bring the market back into a desirable state. Further remarks suggest that other OPEC members are in agreement with the extension. Prices are currently up by 3.09 percent to $49.32 per barrel.
As one would expect, the Canadian dollar is sharing in oil strength, and is currently up approximately 0.7 percent against the US dollar. Today’s expected range is 1.3565 – 1.3665.
For the week of May 1-5
GDP figures released from both Canada and the United States on Friday were lower than expected. In Canada, month-over-month growth stalled in February, with zero percent growth compared to an expectation of 0.1 percent growth. This difference is significant compared to the previous month when growth was 0.6 percent. On a year-over-year basis growth has not exceeded expectations, despite an uptick to 2.5 percent. February’s decreasing of manufacturing (down 0.6 percent) and production has fueled disappointment. Annualized quarter-over-quarter GDP growth in the United States was released at 0.7 percent, dropping from 2.1 percent in the prior reading and short of the expected 1.0 percent.
University of Michigan Sentiment dropped in the United States for April to 97.0 from a prior posting of 98.0. American’s view of the current economic condition decreased slightly from 113.2 to 112.7, while expectations for the future jumped to 87 from 86.5.
Oil prices received some positivity on Friday as Russia stated they’ve met their required production cuts amounting to 300 thousand barrels. Prices ended the day up by .74 percent, but are down by .55 percent as of Monday, May 1. The Canadian dollar is currently trading flat against the US dollar.
Releases expected out of Canada this week will include international merchandise trades and employment figures. Canada is expected to have added 10K positions in April after adding 19.4K positions in March. Releases out of the United States will be seen for ISM manufacturing, ADP employment changes, trade balance, and employment figures. The Federal Reserve will also hold a policy meeting where a decision is expected to be released on May 3.