Forex Investment and Currency Trading

Country
Canada
Event
International Trade (July)
Release Date
September 11
Market Consensus
$5.6B
Economics: After riding on the unrelenting boom in commodity prices in the first half of this year, the first signs of a reversal in fortune for the Canadian merchandise trade balance are expected to emerge in July, with the surplus falling to $5.7B. Indeed, with exports of energy products accounting for over 30% of total merchandise exports, the 4.1% M/M decline in energy prices will certainly not go unnoticed. Nonetheless, during the month, exports are expected to grow by 1.5% M/M, while imports should rise by more meaningful 2.0% M/M. Indeed, although commodity prices have [...]

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It is expected that the Bank of Canada to leave the overnight rate unchanged at 3.0%.  The accompanying statement will be monitored closely to see what weight the central bank places on the various risks confronting the Canadian economy that justifies an unchanged policy stance. At the conclusion of the last policy-setting meeting July 15, the central bank indicated that the economy continued to confront two risks that could potentially apply greater downward pressure on overall economic growth: “the protracted weakness in the U.S. economy: [and] ongoing turbulence in global financial markets.” However, these risks had been evolving largely in line with [...]

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Economics: The Bank of Canada is expected to keep rates on hold at 3%. Admittedly, there are arguments that extend in both directions. First, the economy is unambiguously weak. Second, the slowdown in economic activity has started to sow the seeds of some moderation in price pressures. Core CPI still remains below the Bank’s 2% operational target, and was up 1.5% Y/Y in July. Other price metrics have also eased in recent months. But there is still some risk associated with headline price pressures associated with movement in commodities and the loonie, and on that front, the Bank will want [...]

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On June 10 the BoC shocked financial markets by not only keeping its key interest rate unchanged at 3.00% (there was almost unanimous consensus for a 25bps rate cut) but moved back from an easing to a neutral bias. After tougher inflation talk from the Fed and ECB ahead of the June 13-14 G8 summit, the BoC joined them in citing upside inflation risk as the rationale behind its decision. Since the BoC’s April monetary report, real-side economic developments have been broadly in line with expectations but ‘the balance of risks to the Bank’s April projection for inflation in Canada [...]

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