Weekly Economic Update

For the week of March 30 to April 3

463005465In Canada this morning, the Industrial Product Price has increased by 1.8% on a month-over-month basis for February, beating expectations of 0.9%. The Raw Materials Price Index also increased by more than forecast with a gain of 6.1% in February. In the United States, Personal Income has increased by 0.4% for February while Personal Spending in up by 0.1%. Later today, Pending Homes Sales are expected to post an increase of 0.3% for February.

Focus this week throughout Canada falls on the update to GDP scheduled for tomorrow, March 31, 2015. On a month-over-month basis, GDP is expected to fall by 0.2% in January following a gain of 0.3% in the previous month. On a year-over-year basis, GDP is expected to post a gain of 2.4%. Headlines throughout the United States include updates to the Consumer Confidence Index and Employment data. The Confidence Index is expected to remain flat at 96.4 throughout March. Employment data will release on April 3, with forecasts calling for an increase of 245K jobs in March, with the Unemployment Rate remaining flat at 5.5%.

In the currency markets, the Canadian dollar has fallen in early trading against the USD. The price of oil is down slightly, trading below $49 per barrel, once again weighing on the CAD. The focus for CAD traders will fall on the GDP update scheduled to release tomorrow. Markets will keep a close eye on all key economic indicators as we approach the next Bank of Canada rate decision scheduled for April 15. At this time, it is not expected to see another rate cut at the April announcement.

Todays expected range: 1.2595 – 1.2695

Source: Bloomberg

Posted by Concentra Financial Markets

Weekly Economic Update

For the week of March 23 to 27

487806549In Canada this morning the Bloomberg Nanos Confidence Index will update for the week ending March 20, 2015. The Index has increased in two straight weeks leading up to today’s announcement, currently siting at 54.6. In the United States, the Chicago Fed National Activity Index has updated for February, releasing below expectations at -0.11 compared to forecasts calling for 0.10. A reading below 0 in the measure indicates below-trend growth throughout the economy. Later today, Existing Home Sales are expected to release at 4.90M for February, a month-over-month gain of 1.7% following a drop of 4.9% in the most recent update.

It is a very quiet week on the economic calendar throughout Canada without any other scheduled economic releases. Focus will shift to data out of the United States. In the U.S. headlines include updates to the Consumer Price Index, Durable Goods Orders, and GDP. The CPI is expected to rise by 0.2% for February with a drop of 0.1% on a year-over-year basis. GDP is scheduled to update on Friday, March 27 with forecasts calling for an annualized rate of 2.4% for the fourth quarter.

In the FX markets, the Canadian dollar is showing slight strength against its U.S counterpart in early trading this morning. With the lack of economic data on the Canadian schedule for the remainder of the week, focus will fall on the updates out of the United States and fluctuations in the price of oil. Crude is now trading just below $46 per barrel. Currently the market is pricing in another rate cut from the Bank of Canada with expectations to see a drop over the next 12 months. Governor Poloz is set to deliver a speech on Thursday which could spark a shift in currency markets depending on the tone of the announcement.

Todays expected range: 1.2430 – 1.2530

Source: Bloomberg

Posted by Concentra Financial Markets

Weekly Economic Update

471920189Throughout Canada this morning, International Securities Transactions have released at 5.73B for January, higher than the expected value of -2.00B. International investors bought record levels of provincial debt in January causing today’s data to release higher than expected. Later today, the Bloomberg Nanos Confidence Index will update for the week ending March 13, 2015 after hitting 54.2 in the previous update, the highest level since early February. In the United States, Empire Manufacturing has fallen to 6.9 for March, failing to meet economist forecasts of 8.00. Later this morning, Industrial Production is expected to post a gain of 0.2% for February, matching the gain from the previous update.

Focus this week throughout Canada falls on the update to the Consumer Price Index and Retails Sales scheduled to release Friday, March 20. The CPI is expected to post a month over month gain of 0.7% for February and 1.0% y/y. Retail Sales are forecast to fall by 0.5% for January following a drop of 2.0% in the latest release. In the U.S. focus shifts to the FOMC rate decision scheduled for Wednesday, March 18. Analysts are expecting the rate to remain unchanged although we may see a more aggressive Federal Reserve, indicating a potential rate increase sometime later in 2015. Also on the schedule this week, Housing Starts are expected to post a drop of 2.4% for February after falling by 2.0% in the previous month.

In the currency markets, the Canadian dollar has fallen slightly against the USD in trading this morning. Oil continues to be a key risk to the Canadian dollar, now trading below $45 dollars per barrel which has weighed on the CAD significantly. Focus will fall on the Federal Reserve announcement this week. If we see a more aggressive tone from the U.S. central bank, the CAD could fall even further against the USD.

Todays expected range: 1.2732 – 1.2832

Source: Bloomberg

Posted by Concentra Financial Markets

Weekly Economic Update

For the week of March 9 to 13

StatisticsIn Canada this morning, Housing Starts have released at 156.3K for February, failing to meet expectations of 179.0K, falling from a revised value of 187.0K in the previous month. This drop of 16% brings the number of Housing Starts to the lowest level since 2009 as cold weather held up construction. It is quiet throughout the United States with only one release on the schedule later this morning. The Labor Market Conditions Index will update for February after releasing at 4.9 in the previous update.

Focus in Canada this week falls on the update to Employment scheduled for Friday, March 13. The Unemployment Rate is expected to increase slightly to 6.7% for February while the Net Change in Employment is forecast to fall slightly by 5.0K, following an increase of 35.4K in the most recent update. Headlines throughout the United States include updates to Wholesale Inventories, Retail Sales, the PPI, and Industrial Production. Wholesale Inventories are expected to fall by 0.1% for January while Retail Sales are forecast to post a gain of 0.3% for February.

In the currency markets, the Canadian dollar has shown strength in early trading this morning. The price of oil continues to fluctuate, once again trading below $50 per barrel. This week’s employment data will be a key indicator for the Bank of Canada as we move towards the next rate decision. Markets are currently not expecting another rate cut but it will take continued economic strength as well as an improving price of crude oil to shift the Bank of Canada to a more aggressive tone.

Todays expected range: 1.2535 – 1.2635

Source: Bloomberg

Posted by Concentra Financial Markets

Weekly Economic Update

For the week of February 17 to 20

487806549In Canada this morning, International Securities Transactions are scheduled to update for December after releasing at 4.29B in November. Existing Home Sales will release for January following a decrease of 5.8% in February. Later this morning an update will be made to the Bloomberg Nanos Confidence Index for the week ending February 13, 2015, after falling to 54.6 in last week’s update. In the United States, Empire Manufacturing is expected to fall from 9.95 in January to 8.00 in February. Also on the schedule, the NAHB Housing Market Index is forecast to rise to 58 for February, up from 57 in the latest release.

Focus this week throughout Canada falls on the update to Retails Sales scheduled for Friday. Sales are forecast to fall by 0.4% m/m for December, following an increase of 0.4% in November. Excluding autos, sales are expected to drop by 0.8% compared to an increase of 0.7% last month. Headlines throughout the United States include updates to Housing Starts, the Leading Index, and Existing Homes Sales. Housing Starts are expected to fall by 1.7% m/m for January following a gain of 4.4% in December while existing home sales are also expected to fall with a drop of 0.8% for January. The Leading Index is forecast to release at a slight gain of 0.3% for January, following an increase of 0.3% in the latest update.

In the currency market, the Canadian dollar has shown strength against its U.S. counterpart in trading today, gaining close to one cent in the exchange, now trading below 1.2375 for the first time since early February. The price of oil is now trading close to $53 per barrel, leading the gain in the Canadian dollar following the long weekend. We are now just over two weeks away until the next Bank of Canada Rate Announcement, and although the price of oil has rebounded slightly, we may see Governor Poloz maintain his dovish tone with the overall economy continuing to show signs of weakness.

Todays expected range: 1.2320 – 1.2420

Weekly Economic Update

For the week of February 9 to 13

Hands holding a  piggy bank and a house modelIt is fairly quiet in Canada with only Housing Starts and Bloomberg Nanons Confidence releasing this morning. Housing Starts for January released at 187.3K (179.6Krevised) compared to the previous revised release of 180.3K in December and according to CMHC’s Chief Economist, Bob Dugan, “Overall, economic and demographic factors remain supportive of housing demand.”

Recapping employment figures from Friday, Canadian data released much higher than expectations with a 34.4K gain compared to expectations of a 5K gain. The release showed strong numbers but with weak supporting data as the increase in jobs came almost solely from part time positions as full time jobs fell -12K. South of the border US Nonfarm Payrolls released very strong Friday, up by 257K in January, overall the US labour market continues looking strong.

Looking at the week ahead it is a fairly quiet one in Canada with the main releases being the New Housing Price Index on Thursday and Manufacturing Sales Friday. Our southerly neighbours have a slightly busier docket with the key releases being Mortgage Applications tomorrow, Retails Sales on Wednesday alongside Jobless Claims, and Import Prices and the U of M Consumer Sentiment Index on Friday.

Though it is quiet in the market post-employment data, headlines abroad from Greece and the Ukraine are drawing attention. Additionally oil is up currently testing the 50 day Moving Average and a break above this could give further strength to CAD against its USD counterpart.

In the currency markets USDCAD jumped almost half a cent on Friday after employment figures as US numbers greatly over shadowed Canadian figures, the pair then closed the week at 1.2524. Into this morning’s session CAD is up alongside oil gaining 0.0025 on the day and currently hovering around 1.25; the correlation between CAD and oil remains strong and a key driver for USDCAD.

Todays’ Expected Range 1.2458 – 1.2558

Source: Bloomberg

Posted by Concentra Financial Markets

Weekly Economic Update

471920189International Securities Transactions are scheduled to update for November this morning after releasing at 9.53B in the latest update. Later this morning there will also be an update to the Bloomberg Nanos Confidence Index for the period ending January 16. It will be a quiet day out of the United States without any data on the schedule. Focus will shift to releases scheduled for later this week. The Update to the CPI on Friday released as expected with a drop of 0.4% on a month over month basis. This was the largest drop in six years which was caused by the recent slump in energy pricing.

It is an important week in the Canadian economy with the next Bank of Canada rate decision on the schedule for Wednesday the 21st. Given the recent economic data out of the country and the price of oil, it is expected to see Bank of Canada Governor Poloz remain neutral once again. With the current economic outlook, some investors aren’t expecting rates to increase until 2016. Later this week, focus will shift to an update to the CPI and Retail Sales scheduled to release on Friday.

Headlines this week out of the United States include updates to Housing Starts, Home Sales, and the Leading Index. Housing Starts are expected to post an increase of 1.2% for December after falling by 1.6% in the latest update while Existing Home Sales are also expected to post a gain for December of 3.0%. The Leading Index is forecast to rise by 0.4% for December after an increase of 0.6% in November.

The Canadian dollar is unchanged in early trading against its U.S. counterpart this morning. Focus shifts to the next Bank of Canada announcement scheduled for Wednesday, as the price of oil has consistently traded between $45 and $50 per barrel over the last week. The key in the rate announcement will be how the BOC assess the current oil situation. They have mentioned in previous announcement that the drop in oil was not a concern but they may change their tone as the price has remained low. The EUR has increased above its low but markets are still expecting some form of stimulus to come from the ECB.

Todays expected range: 1.1940 – 1.2040

Source: Bloomberg

Posted by Concentra Financial Markets