Countercurrency price action and risk sentiment ruled the Loonie’s price action this week. Will it dance to its own tune this week?
Here are the potential catalysts!
Monthly GDP (Oct 1, 12:30 pm GMT)
The monthly release showed Canada’s economy growing by 0.2% in June, maintaining its May growth and faster than the 0.1% uptick that analysts had expected.
All eyes were on the quarterly release, however, which showed GDP climbing by 0.9% after clocking in at 0.1% in the last two quarters. Not surprisingly, the Loonie shot higher at the news.
This week market geeks see the monthly reading slow down from 0.2% to 0.1%. A much weaker reading could shake the Bank of Canada (BOC)’s relatively chill approach to potential easing, while strong numbers could validate its decision to keep its rates steady for another month.
Trade balance (Oct 4, 12:30 pm GMT)
Canada’s trade deficit widened from 0.06B CAD in June to 1.12B in July. That’s way higher than the 0.4B CAD figure that many had expected!
Turned out, purchases of consumer goods helped push imports 1.2% higher for the month. Meanwhile, lower energy-related product sales helped drag exports 0.9% lower.
Luckily for Loonie bulls, the BOC had also released its decision to keep its rates steady in the same trading session.
Will Loonie bulls get lucky again this week? Word around is that we could see another 1.10B shortfall for the month of August. Take note that the report will be printed around other closely watched data releases such as Canada’s IVEY PMI and the U.S. NFP numbers.
IVEY PMI (Oct 4, 2:00 pm GMT)Loonie traders love watching the IVEY PMI report because it helps predict manufacturing and even labor market trends.
In last week’s release the better-than-expected IVEY PMI coincided with Canada’s strong labor market data printed at the same time.
This week analysts see it clocking in at 62.6, higher than 60.6 index reading in August.
Planning on trading the event? Consider watching the U.S. NFP report at 1:30 pm GMT, as it could also influence how USD/CAD trades during the trading session.
Missed last week’s price action? Read CAD’s price recap for September 23 – 27!