The Bank of Canada rocked Loonie bulls this week as they surprised with a more dovish monetary policy statement than expected.
Canadian Headlines and Economic data
Monday:
- Canada Terane House Price Index was up 0.2% m/m in December
- Oil Advances to One-Week High as Unrest Hits Iraq and Libya
Tuesday:
- We see a broad
- Canadian manufacturing sales declined 0.6% to $57.0 billion in November, the third consecutive monthly decrease
- Poloz enters home stretch hawkish on rates
- We see a broad move lower in risk assets, including the Loonie, during the early Asia session was likely on news of the Chinese Coronavirus spreading. This was also where we saw pressure on oil prices on the idea the Coronavirus will affect travel and oil demand.
Wednesday:
- On a seasonally adjusted monthly basis, Canada CPI rose 0.4% in December, following a 0.1% increase in November.
- Nationally, new house prices in Canada rose 0.2% in Dec., the largest monthly increase for the month of December since 2009.
- Bank of Canada maintains overnight rate target at 1.75%
- Bank of Canada Holds Rates, Signals Less Confidence in Outlook – the dovishness in the economic outlook was highly expected by traders, hence the crushing blow to Loonie bulls over the next few hours after the monetary policy statement.
- Oil falls as surplus forecast overshadows Libya disruption
Thursday:
- API reported crude oil build of 1.57M barrels vs. projected draw – this was the likely catalyst for the Loonie rally during the U.S. session as oil prices rallied on a lower inventory number than expected.
Friday:
