Weak domestic data rained on the Loonie’s parade this week. Which catalysts can affect the comdoll this week?
Monthly GDP (June 28, 1:30 pm GMT)
A quarterly reading printed in late May showed the economy growing by 0.1% in Q1 2019, the same as in Q4 2018 but still the lowest since Q2 2016.
A closer look told us that household spending and fixed investment boosted growth while exports and housing investment lagged.
At the time, the relatively steady growth was a relief to Loonie bulls who had been dealing with a bearish reaction to the BOC statement released earlier in the week.
This week analysts expect to see the monthly growth ease from 0.5% to 0.2% in April. This should translate to an annualized growth of 1.5%, a bit higher than the 1.3% uptick seen in March.
After a slow start to the year, will Canada’s economy pick up in Q2? Watch out for significant hits or miss that could cause intraday volatility for the Loonie!
Overall risk sentiment
Canada won’t be printing a lot of top-tier releases this week, so bulls and bears will likely take cues from overall risk sentiment in the markets.
Specifically, they will be watching the “extended meeting” between Trump and Xi in the G20 summit in Osaka near the weekend.
Hints of de-escalation of the tariff war between the U.S. and China is good news for Canada’s exports, which depends a lot on U.S. demand.
On the other hand, worsening trade relations or lack of real progress after the much-awaited talks could cause more uncertainty not only in the goods markets, but also in the major central bankers’ policies.
Can the Loonie extend its rallies from the previous week? Or will Friday’s bearish themes continue to drag the comdoll lower?
Missed last week’s price action? Read CAD’s price recap for June 17 – 21!