Forex Investment and Currency Trading

The Current Situation
Seeming Immunity: Both headline and core inflation measures rose in April, but remained below target despite rising global relative pricing pressures. Canada’s seeming immunity thus far stems from the strong CAD’s lowering of import prices for most non-food and -energy goods (Figure 3), and from slower home price appreciation (Figure 4). The dampening effect of drastic price-tag reductions and incentives from retailers late last year, and the 1% cut in the Goods and Services tax this year, have also helped to shield Canadians from external inflationary pressures.

Limited Pricing Power: Producers are feeling the pinch of higher input costs, [...]

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Friday May, 9th
 
Canadian Economic Data and Events         

07:00 April Employment Change
07:00 April Unemployment Rate        
08:30 March International Merchandise Trade                     

Employment likely mustered a slightly below-trend gain in April.  On the negative side, employment growth may have been weaker in the transportation and warehousing sector after a large gain the prior month.  However, on the plus side, an increase in the information, culture and recreation sector is probable after the outsized decline in March, which represented the second largest drop since 2002.  In the first quarter, employment advanced by a solid 104.0K.  Roughly half of that growth was accounted for by the construction [...]

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As indicated by the February GDP report, Canada’s 1Q growth will be lower than the 1% annualized expected by the BoC in its monetary policy report, perhaps even lower than annualized US growth of 0.6%. But market thinks that special factors have played a large role in the poor 1Q.
Canadian GDP unexpectedly fell 0.2% in February, putting at risk the BoC estimate that GDP rose at an annual pace of 1% in 1Q 2008 (we will have to wait until the end of May for the March and 1Q data). The negative surprise in the monthly GDP arises because it showed [...]

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The Bank of Canada’s updated economic forecast is in line with market outlook. Market expects the economy to grow by 1.6% this year and 2.3% in 2009. The view remains that Canada’s trade sector will be the main impediment to growth as a result of the weaker U.S. economy and the high level of the Canadian dollar. Credit market conditions have tightened since the credit market crisis last summer, although this has done little to slow business and household credit growth as the improvement in Canada’s terms of trade bolsters incomes.
 
Canada’s labour market continues to be the easiest way to see [...]

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Canadian Trade, US Demand and the Ambassador Bridge
Canadian GDP shrank 0.2% (cons: +0.2%) in February dispelling confidence that the economy was emerging unscathed from the US slowdown. The conduit for the US downturn to the Canadian economy is real exports, which reflects activity rather than surging commodity prices. A more impressive representation of the link between Canadian trade and US demand is the Ambassador Bridge linking Windsor, Ontario with Detroit, Michigan. More than one-quarter of the merchandise trade between Canada and the US crosses the bridge, energy products are a notable exception. Exports have been and will be a constant [...]

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