Falling oil prices and countercurrency price action dragged the Loonie lower last week. Which factors can influence the comdoll this week?
Here are a few choices:
CPI (Sept 18, 1:30 pm GMT)
Consumer prices in Canada rose by 2.0% from a year ago in July, steady from its June growth and higher than the 1.7% uptick that markets had expected.
The monthly reading clocked in at 0.5%, up from the 0.2% growth seen in June and better than the 0.2% increase that analysts saw. Not surprisingly, the better-than-expected numbers boosted the Loonie higher against its counterparts, at least until other catalysts knocked it back down.
This week’s numbers could show monthly inflation decline by 0.2%. Meanwhile, the annualized reading is expected to maintain its 2.0% growth.
A strong labor market is one of the reasons why the Bank of Canada (BOC) can hold back from easing its policies. But if it doesn’t translate to more spending and higher consumer prices, then Governor Poloz and his team could jump on the bandwagon sooner than markets are pricing in.
Retail sales (Sept 20, 1:30 pm GMT)
Retail trading stagnated in June, which is still better than the 0.2% decline seen in May and the 0.1% decrease that analysts had expected. The core figure, which excludes volatile items such as automobiles, popped up by 0.9% after falling by 0.4% in May.At the time of the release, the relatively uneventful data was overshadowed by news that China has slapped tariffs on $75 billion worth of U.S. products and Trump had ordered companies to look for “alternative to China” in production.
This week, market geeks see headline retail sales printing a 0.4% growth, while the core reading is expected to see a 0.2% increase.
Oil prices and market risk sentiment
In case you were too busy watching Miley, Ariana, and Lana Del Ray tell you not to call them angels, you should know that things just heated up in the Middle East and, no, it’s not just because some oil plants were set on fire.
See, U.S. Secretary of State Mike Pompeo said that Iran was behind the drone attacks. Later, Trump himself tweeted that they “know the culprit” and that they’re “locked and loaded” and just waiting on Saudi Arabia for cues on how to proceed.
Black Crack prices have since retraced since the market open, but you can bet that we’ll see more volatility for both crude oil and the Loonie in the next couple of days!
Meanwhile, top-tier events from the U.K. and Australia, as well as the Fed’s (and three others’) monetary policy announcements could also affect overall risk appetite and influence the Loonie’s price action.
Missed last week’s price action? Read CAD’s price recap for September 9 – 13!