Will the Loonie see a more uniform price action this week? Here are the catalysts you should watch out for.
Poloz’ speech (May 6, 6:45 pm GMT)
We know from last week’s price action that Bank of Canada (BOC) Governor Poloz can move the Loonie’s weekly trends by sharing his two cents on the economy.
This week he will give a speech regarding Canada’s mortgage market. If he hints at significant concerns that might affect the central bank’s policies, then we could see volatile moves for the Loonie early in the week.
IVEY PMI (May 7, 3:00 pm GMT)
The closely-watched IVEY PMI, which measures the pace of purchasing in Canada, climbed from a five-month low to 54.3 in March.
There were no other major economic data scheduled on that day, so it was easy for Loonie bulls to take advantage of the better-than-expected release.
This time around analysts expect the index reading to slow down to 51.3 in April. I’m not seeing top-tier reports that could dilute Loonie traders’ reaction to the report, so y’all make sure you stay tuned and ready in case the release comes in significantly worse or better than many are expecting!
Trade balance (May 9, 1:30 pm GMT)
Canada’s trade deficit narrowed down from 3.09B CAD to 2.90B CAD in February. That’s better than the 3.5B CAD shortfall that many had expected!
Both imports and exports took hits, with lower gold purchases dragging the former and lower non-energy product sales dragging the latter.
Can March produce stronger trade numbers for Canada? Analysts see the deficit narrowing further to 2.30B CAD with both imports and exports clocking in gains.
The BOC is worried about housing and international trade conflicts, so you can be sure that members will pay attention to this month’s release. That means you should too!
Labor market data (May 10, 1:30 pm GMT)
Canada lost a net 7,200 jobs in March, lower than the expected 1,000 gain and 3,000 addition in February.
Fortunately, the unemployment rate remained at 5.8% and hourly wages increased by 2.3% from a year ago in March (up from 2.2% in February). Even more fortunately for the bulls, traders were still excited over the rally in crude oil prices following a strong U.S. jobs release and reports of military action in Libya.
This week traders expect to see a net addition of 15,000 and for unemployment rate and labor force participation rate to remain at 5.8% and 65.7% respectively.
Oil and risk sentiment moves
Crude oil prices took hits in early Asian session trading today after the Donald threatened to more tariffs on $200B worth of China’s goods and new tariffs on an additional $350B worth of Chinese products.
….of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!
— Donald J. Trump (@realDonaldTrump) May 5, 2019
On the other hand, the U.S. just deployed a carrier strike group and a few bombers in the Middle East to deter Iran from allegedly endangering Uncle Sam’s interest in the area.
These headlines are still relatively fresh, so you might want to keep close tabs and see how they (and related headlines) affect Black Crack and Loonie prices over the next couple of days.
Missed last week’s price action? Read CAD’s price recap for April 29 – May 3!