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Risk sentiment sent the Loonie all over the charts last week. Can we see a more uniform direction with this week’s catalysts?
Here’s a list of events you should watch out for:
CPI reports (Nov 20, 1:30 pm GMT)
- Annual inflation inched up by 1.9%, the lowest since March, when analysts had seen a 2.1% growth
- Monthly CPI slipped by 0.4%, worse than the 0.1% decrease seen in August. Transportation, recreation, and education and reading dragged on the prices
- Core CPI clocked in at 1.9% from a year ago in September, the lowest since April
- CAD gained against the dollar but lost pips against the comdolls, GBP, and CHF
- Market players expect the headline CPI to come in at 0.3% for October
- Annualized headline CPI could maintain its 1.9% reading
- BOC’s other CPI measures (common, median, trimmed) are also due for release
Poloz’ speech (Nov 21, 1:40 pm GMT)
- Stephen Poloz is slated to talk about economic change in Toronto
- A few days ago the BOC Governor talked about longer-term structural forces as central banks currently focus on global trade war and geopolitical risks
Retail sales (Nov 22, 1:30 pm GMT)
- Retail trading weakened by 0.1% in August, much slower than the 0.6% seen in July and the 0.4% increase that markets had expected
- Core retail sales also disappointed at -0.2% vs. 0.0% expected and 0.0% reading in July
- Instead of falling, CAD jumped higher on the back of post-election optimism
- Analysts expect the headline retail sales at 0.1% in September
Technical Snapshot
- Stochastic marks CAD as “oversold” against USD, GBP, NZD, and CHF
- EUR/CAD, GBP/CAD, and NZD/CAD are all bullish in the short-term
- Among the three pairs, EUR/CAD and NZD/CAD are both “bearish but weakening” in the longer SMAs. Watch out for retracement or reversals!
