WEEKLY REVIEW SUMMARY 2 – 6 JANUARY
The first week of the New Year was very busy. The ISM Manufacturing PMI was better than expected. We saw quite a decline for NFP printing 157K, lower than forecast. The FED meeting minutes were reserved, as the policymakers are waiting to see how the economy will react to Donald Trump’s economic policies. Canada’s employment change was quite the winner with a gain of 53.7. Unemployment rose slightly from 6.8% to 6.9%. Trade balance forecast was also better than expected, reading at 0.53B from the previous -1.02B.
THE WEEK AHEAD 09 – 13 JANUARY
1. BoC Business Outlook Survey (Monday)
This is the first economic event on the calendar on Monday for Canada. The survey provides a general idea of the business conditions in the country.
2. Building Permits (Tuesday)
Building permits usually show a lot of flactuation. The previous reading came out at 8.7%, however the forecast for November is 2.4%.
3. Housing Starts (Tuesday)
Housing starts dropped to 183 thousand in November, short of the forecast of 191 thousand. Prediction for December is 195 thousand.
4. NHPI (Thursday)
The forecast for new housing price index is 0.2% with the previous reading at 0.4%.
Bias on CAD?
I am bearish
US economy has started 2017 on a positive note, although the FED is waiting to see what the effect of the Trump administration will have on the economy. I think sentiment is still bullish for the greenback. There is optimism that BoC will need to tighten up this year based on growth. BoC however seems to be uncertain with the Trump administration mandate. Poloz said that BoC will watch and respond when needed. This kind of uncertainty usually brings volatility.