Forex Investment and Currency Trading

The Bank of Canada surprised markets today by delivering a bigger than expected 75bps rate cut, leaving the overnight rate at 1.50%. This is lower than the previous cyclical low earlier in the decade and matches a low last seen in the post-war era. The decision to lop off more from the overnight rate was largely driven by the deteriorating outlook for the global economy.
Previously, the Bank had cited three key concerns, all of which have deteriorated. In today’s communiqué, the Bank cited that “the global recession will be broader and deeper than previously anticipated.” Moreover, they characterized financial markets [...]

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December 5  - Canada

Employment change (Nov)
Unemployment rate (Nov)

 Despite the rather difficult economic environment, the Canadian labour market has been surprisingly resilient, creating a whopping 132K jobs in the past three months. This resiliency should come to an end, and it is expected that the Canadian economy to shed 25K jobs in November as employers reduce their payrolls to contend with slackening demand. Much of the job losses are likely to come from the ailing manufacturing sector, though also expect to see some declines in service sector employment. The unemployment rate should climb to 6.4%, which will be the highest rate of unemployment [...]

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Economics: Plunging commodity prices and growing economic slack will continue to be the key themes for lower Canadian consumer price inflation. For October, given that gasoline and natural gas prices have declined by double-digits and wage pressures appear to be abating,  expect consumer prices to ease further with headline CPI falling by a dramatic 0.4% M/M. This will bring the annual rate of consumer price inflation to 3.3% Y/Y. On a seasonally-adjusted basis, all-items CPI is expected to fall by a more modest 0.1% M/M. The Bank of Canada’s core consumer index should remain flat on the month (but rise [...]

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Event Date - November 10
Event - Housing Starts (October)
Market Consensus - 200K

Economics: The Canadian housing market boom is over, and the forecast is for leaner times ahead. Indeed, with a sluggish domestic economy and tighter lending conditions, Canadian housing activity should continue to cool, though the moderation in activity is expected to be both measured and orderly. For October, analysts expect Canadian residential housing starts to fall to 200K, from 219K in September. Most of the declines are expected to come from the volatile multi-unit component, though single-unit starts are also likely to be lower. In the coming months, as [...]

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