The Loonie danced to the tune of crude oil and trade war updates last week. Will the same catalysts influence the comdoll this week?
Here’s a list of the top-tier events to watch:
CPI and retail sales combo (Sept. 21, 12:30 pm GMT)
Canada’s inflation rate surprised to the upside last month, printing a 0.5% rise when analysts had only expected a 0.1% increase.
The annualized reading also impressed with a solid 3.0% growth that marked its strongest reading since September 2011.
This week we’ll see if Canada’s consumer prices have risen at a faster rate in August.
Buzzes of the BOC possibly raising its rates soon are getting louder, so a faster-than-expected CPI would feed the rumor mill and could boost the Loonie higher.
Meanwhile, retail activity is expected to print a 0.4% increase in July after seeing a 0.2% decrease in June.
Core retail sales is also expected to improve to a 0.6% after slipping by 0.1% in the previous month.
U.S. consumers have been pretty confident and busy lately, so it would be interesting to see if the Canadian neighbors have caught the spending bug.
Crude oil and trade war updates
Another week has passed without a solid deal between the U.S. and Canada.
Though Canada’s reps maintain that talks have been productive, investors will remain wary until we see solid updates.
Meanwhile, we’re another week closer to the U.S. officially implementing Iran’s sanctions.
And if that’s not enough uncertainty for you, then remember that the U.S. and China could further escalate their trade war this week, enough for high-yielding bets like crude oil to take hits.
Make sure you don’t miss any market-moving updates over the next couple of days!
Last Week’s Price Review
After three weeks of net losses, the Loonie is finally on the winning side since the Loonie is currently on track to closing out the week in second place (as of 5:00 pm GMT).
The Loonie was taking directional cues from oil this week. And market analysts say that oil is closing out the week in positive territory because supply curbs, due to sanctions against Iran, were able to trump demand-side concerns because of the expected damage from Hurricane Florence and higher U.S. gasoline inventories.
But as usual, trade-related news also had an effect on the Loonie’s price action. The Loonie, for example, got a noticeable boost when Trump said that trade talks with Canada are going well.
The Loonie was also able to withstand the pullback in oil prices on Wednesday, apparently because of the Wall Street Journal report that claimed that U.S. Treasury Secretary Steven Mnuchin has invited China to another round of trade talks, which we now know as the real deal. There were also some NAFTA-related updates that likely helped to cushion the Loonie from falling oil prices.
Most CAD pairs (except USD/CAD and CAD/JPY) did finally succumb to retreating oil prices on Thursday.
However, the majority of CAD pairs didn’t really fall below last week’s closing prices (dashed, horizontal line). And oil prices also ended the week by recovering from the two-day slide, which apparently gave the Loonie enough “oomph” to score wins against the Aussie and Kiwi.