Canada is printing a bunch of top-tier reports this week! Question is, how will the Loonie react?
CPI numbers (June 19, 1:30 pm GMT)
Consumer prices rose by 0.4% in April, which was faster than the 0.7% increase we saw in March and the third consecutive month of gains for the report.
The 0.7% gain translated to an annualized growth of 2.0%, higher than the previous month’s 1.9% growth and what analysts had expected.
Turned out, shelter and transportation pushed prices higher while gasoline dragged it lower.
The better-than-expected numbers, coupled with Middle East tensions at the time, helped boost the Loonie to its intraweek highs.
This week analysts expect to see a 0.2% gain in headline consumer prices and a 2.2% gain for its annualized version.
Keep in mind that crude oil prices dipped by around 16% in May, which could drag on overall consumer prices.
Question is, will potential dips in CPI numbers be enough to knock the Bank of Canada (BOC) from its conviction that the recent economic slowdown is “temporary?”
Retail sales (June 21, 1:30 pm GMT)
Retail activity inched 1.1% higher in March, which is better than the 1.0% gain that we saw in February and what many had expected. Heck, it’s the fastest growth since May 2018!
Unfortunately, traders were more interested in pricing in the U.S.-China trade conflict and easing Middle East tensions at the time.
This week analysts see a 0.1% increase for April’s headline numbers, while the core figure is expected to print a 0.3% uptick from March’s 0.7% gain.
Only Uncle Sam’s manufacturing and services PMIs scheduled an hour after the release is up around the time of Canada’s retail sales report, so it’s possible that we’ll get a more straightforward reaction this time.
Missed last week’s price action? Read CAD’s price recap for June 10 – 14!