Weekly Economic Update

For the week of April 9-13.

Employment figures for both Canada and the United States were released on Friday. According to Statistics Canada, Canada’s unemployment rate remained at 5.8%. Overall employment increased by 32.3k, more than half of which were in construction. The breakdown shows that full–time employment rose 68.3k, and part-time employment fell 35.9k. The March employment report also showed that self-employment rose 19.8k, private employment declined 7k, and public employment rose 19.6k. Average hourly wages of permanent employees remained at 3.1%.

US non-farm payrolls rose to 103k in March, as February’s was revised upwards to 326k. Meanwhile, unemployment rate came higher than consensus at 4.1% versus 4.0%. The manufacturing sector continued to show gains, while service payrolls were soft and construction hiring declined.

Economic indicators scheduled to be released in Canada this week include Housing Starts, BoC’s Business Outlook/Senior Loan Officer Surveys, Building Permits, and Existing Homes Sales data. In the US, scheduled releases include Producer Price Index, Wholesale Inventories, Consumer Price Index, Import and Export Price Index, and University of Michigan’s April sentiment readings.

Both US and Canada government yields are trading 1 to 2bps higher with S&P futures higher (+11.4). WTI crude oil is trading higher this morning at $62.72. The Canadian dollar is trading at slightly lower to Friday’s market closing levels; it’s currently trading 1.2781 against the US dollar.

Source: Bloomberg

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Weekly Economic Update

For the week of April 2-6.

Canadian GDP  declined 0.1 percent month-over-month in January, lower than the increased expectations of 0.1 percent. A sharp decline in oil production and real estate were the main culprits for the decline. Canada led the G7 for economic growth in 2017, but is now widely expected to slow this year after consumers pare spending. January’s decline in GDP puts the economy back on track for sub-2 percent growth for the third straight quarter. On a year-over-year basis, January’s GDP was hovering at a 2.7 percent pace, lower than the expected 2.9 percent pace.

Both US personal income and spending for February came in at the expected 0.4 percent and 0.2 percent, making February the second straight month spending lagged income. Alternatively, savings rate rose 3.4 percent, the highest since August 2017. Some economists believe spending could increase in the coming months, due to the robust labour market, stronger confidence, and lower taxes.

Canadian index releases today will be MLI’s leading indicator, Markit’s Canada Manufacturing PMI, and Bloomberg Nanos’ Confidence. Later this week, international merchandise trade and March employment figures will be released. US releases will be various manufacturing indices, the trade balance, and the March employment report.

Against the US dollar, the Canadian dollar is trading at similar levels to Thursday’s market close. Today’s expected trading range for the Canadian dollar is 1.2826 – 1.2926.

Source: Bloomberg

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Weekly Economic Update

For the week of March 26-30.

Canadian headline inflation in February accelerated the most it had in three years, coming in at 2.2 percent year-over-year. Consensus expectations were for a 1.9 percent increase, while January’s reading was 1.7 percent increase. The average core measures registered at 2.03 percent, coming in higher for the fifth month and marking the fastest pace since 2012. According to Statistics Canada, higher prices for gas, cars, and mortgage interest costs were the main contributors to the rise in annual inflation. On a month-over-month basis, headline inflation came in at 0.6 percent.

Meanwhile, Canadian retail sales fell short of consensus expectations in January, increasing only by 0.3 percent month-over-month to $49.9 billion, versus expectations of a 1.1 percent increase. Excluding autos, sales were up 0.9 percent. 7 out of the 11 sub-sectors of retail sales experienced an increase.

US new home sales in February came in below expectations at 618k, versus consensus expectations of 620k. The median new home price rose 9.7 percent year-over-year to $326,800, while the average selling price was at $376,700.

In this shortened work week, we will see January GDP numbers, industrial product price and the raw material price index released for Canada. In the US, scheduled releases include various Fed economic activity indices, housing measures, GDP, personal income and spending, and confidence and sentiment indices.

The Canadian dollar is trading at similar levels against its US counterpart since Friday’s market close. Today’s expected trading range for the Canadian dollar is 1.2833 – 1.2933.

Source: Bloomberg

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Weekly Economic Update

For the week of March 19 – 23.

Canadian manufacturing sales in January declined -1.0 percent month-over-month to $54.9 billion versus an estimated 0.9 percent decline. Excluding autos, sales declined 0.1 percent month-over-month to $47.5 billion, while motor vehicle manufacturing sales declined 8 percent. 14 of the 21 industries experienced declines.

For the second consecutive month, the Canadian economy experienced a net outflow of funds. In January, net outflow of funds registered at $7.6 billion, marking the first time since late 2015 that the economy experienced two consecutive months of outflows. Foreigners purchased $5.7 billion of Canadian securities, while Canadians purchased $13.3 billion in foreign securities.

US housing starts in February were below the expected 2.7 percent decline coming in at  7.0 percent to 1,236k. Single family starts rose to 902k, while multi-family starts declined to 334k. Building permits in February also declined more than expected, falling 5.7 percent to 1,298k, versus consensus expectations of a 4.1 percent decline to 1,320k.

There will be three key economic data releases for Canada this week: Wholesale trade sales (released tomorrow), and CPI and retail sales (released Friday). Releases for the US are schedule mid-week. Consensus is for the Fed to raise rates by 25 bps.

The Canadian dollar is trading flat to slightly higher against the US dollar since Friday’s market close. Today’s expected trading range for the Canadian dollar is 1.3021 – 1.3121.

Source: Bloomberg

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Weekly Economic Update

For the week of March 12 – 16.

After losing 88.0k jobs in January, the Canadian economy added 15.4k jobs in February, which was less than consensus expectations of a 21.0k increase. Full-time employment decreased 39.3k after gaining 49.0k the previous month, while part-time employment increased 54.7k after a 137.0k plunge in January. The unemployment rate also decreased to 5.8 percent from 5.9 percent. Wages measured by average hourly earnings for permanent employees decreased to 3.1 percent year-over-year from 3.3 percent.

Non-farm payrolls in the US economy surged past expectations with a 313k gain versus consensus expectations of a 205k increase, also surpassing January’s upward revised 239k gain. The unemployment rate remained at 4.1 percent; however, consensus expectations were for a 0.1 percent decrease to 4.0 percent. Average hourly earnings also came in lower than expected and slowed from January’s downward revised pace of 2.8 percent year-over-year. Earnings growth came in at a pace of 2.6 percent, lower than the expected increase of 2.8 percent. February’s equity markets retreated, while bond yields surged.

Teranet/National Bank will release their house price index tomorrow, and existing home sales on Wednesday. Manufacturing sales and international securities transactions will cap off the week.

Scheduled releases in the US include CPI, retail sales, various manufacturing data, trade data, housing starts and building permits, and the first print of the University of Michigan’s March sentiment index.

The Canadian dollar is trading similarly to Friday’s market closing levels. Today’s expected trading range is 1.2783 – 1.2883.

Source: Bloomberg

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