WEEKLY REVIEW SUMMARY 12 – 16 DEC
The Canadian economic calendar was very quiet in a week that saw the market turn its entire attention to the U.S for the FOMC interest rate announcement. Monday saw Crude oil reach 5% after non OPEC members reached an agreement to cut production, Russia included. By Wednesday oil prices dropped after the FED raised interest rates and said that three more rate hikes are on the cards for 2017. Canadian Manufacturing Sales data for October came out @ -0.8% well below the previous reading @ 0.3%.
Bank of Canada said in the Financial System Review that risk to Canada’s financial system remains unchanged, although the bank worries of Canadian households being vulnerable.
Governor Poloz speech
WEEK AHEAD 19 – 23 DEC
The Canadian economic calendar this week features Wholesale Sales (-1.2%) which will begin the economic events for the week on Tuesday. Wednesday we have no news or data releases coming out of Canada. Thursday’s key events include Core CPI (0.2%), Core Retail Sales (0.0%), and we end the week with GDP (0.3%)
1. Wholesale Sales: (Tuesday)
In September the data printed @ -1.2%. October’s forecast stands @ 0.6%
2. Core CPI: (Thursday)
This is the first event with high volatility for the week. Inflation remains weak as the last recorded data was 0.2%
3. Core Retail Sales: ( Thursday)
The last reading was 0.6% The markets are expecting a strong reading, with the an estimated of 0.7% increase.
October recorded 0.2%. November’s forecast stands @ -0.2%.
5. Retail Sales: (Thursday)
The previous reading was 0.6%. A forecast of 0.2% is expected.
6. GDP: (Friday)
The GDP is released every month. The forecast for November stands @ 0.1%, lower than September’s reading of 0.3%.
What is my bias on CAD?
I am bearish on CAD
The Canadian dollar has been performing largely due to stronger oil prices. The oil rally may be over. Oil prices may fall because of the relation to higher storage inventories. Refineries tend to cut production in January which could delay OPEC’s plan to drain the oil glut, however refineries do this seasonally. My attention has now turned to Oil and central bank activity for more guidance. The U.S dollar could still get stronger in the aftermath of the rate hike, as the market looks towards Trump’s take over of Washington, which could mean a bullish dollar. Keep an eye on Canadian and U.S fundamentals particularly if you are looking to trade USDCAD.
For more info on oil follow link:weekly oil summary