Canada: Wholesale trade, July 2018

Wholesale sales rose for the third time in five months, up 1.5% to $63.9 billion in July, more than offsetting the 0.9% decline in June. Sales were up in four of seven subsectors, representing approximately 66% of total wholesale sales.

The personal and household goods; food, beverage and tobacco; and motor vehicle and parts subsectors led the gains in July, while the miscellaneous subsector posted the largest decline.

In volume terms, wholesale sales increased 1.2%.

Increase in July attributable to higher sales in four of seven subsectors

The personal and household goods subsector rose for the second consecutive month, up 4.2% to $9.2 billion in July. Sales were up in five of six industries, led by the textile, clothing and footwear, and personal goods industries. In volume terms, sales in the subsector increased 4.6%.

Following two consecutive months of declines, sales in the food, beverage and tobacco subsector were up 2.6% to $12.0 billion, mainly on the strength of higher sales in the food industry (+2.4%). The gain in July was partly attributable to an increase in prices as sales in the industry were up 1.6% in volume terms.

Sales in the motor vehicle and parts subsector increased 2.4% to $11.1 billion, the first gain in four months. While increases were reported in all three industries, the motor vehicle industry (+2.0%) contributed the most to the overall gain in July.

Of the three subsectors posting declines in July, the miscellaneous subsector was the largest contributor, edging down 0.2% to $8.2 billion. Two of the subsector’s five industries declined in July, accounting for approximately 41% of the subsector’s sales.

Sales up in six provinces

Sales increased in six provinces in July, which together represented 97% of total wholesale sales in Canada. Quebec and Ontario accounted for most of the gain.

Sales in Quebec increased for the third time in four months, up 3.2% to $11.9 billion in July. Six of seven subsectors increased, led by the personal and household goods (+5.8%) and the food, beverage and tobacco (+5.0%) subsectors. Sales in the personal and household goods subsector increased after two consecutive declines, reaching their highest level on record, while sales in the food, beverage and tobacco subsector increased for the second consecutive month.

Wholesale sales in Ontario rose for the second month in a row, up 1.1% to $32.6 billion in July, on the strength of higher sales in four of seven subsectors. The motor vehicle and parts subsector (+3.1%), which rose after three consecutive monthly declines, and the personal and household goods subsector (+4.0%), which increased for the second consecutive month, contributed the most to higher sales in Ontario.

In Alberta, sales increased for the third time in five months, up 2.5% in July to $7.0 billion. The machinery, equipment and supplies subsector (+4.9%) contributed the most to the gain. The gain in this subsector was attributable to higher sales reported in the construction, forestry, mining and industrial machinery, equipment and supplies industry.

Sales in British Columbia rose 0.7% to $6.7 billion in July, on the strength of higher sales in the food, beverage and tobacco and the building material and supplies subsectors. Both subsectors increased following two consecutive monthly declines.

In dollar terms, the Atlantic provinces reported the largest decline in July. Sales in Newfoundland and Labrador decreased 4.6% to $354 million, on the strength of lower sales in the miscellaneous subsector.

The food, beverage and tobacco subsector contributed the most to the decline in Nova Scotia (-1.0%), New Brunswick (-0.8%) and Prince Edward Island (-0.8%).

Inventories rise in July

Wholesale inventories increased for the fifth time in seven months, up 1.4% to $87.1 billion in July. Gains were recorded in six of seven subsectors, representing 86% of total wholesale inventories.

In dollar terms, the personal and household goods subsector (+4.3%) recorded the largest gain, on the strength of higher inventories in five of six industries. This was the third consecutive monthly increase for the subsector.

Inventories in the building material and supplies subsector (+2.2%) grew for the fifth consecutive month in July. The increase was mostly attributable to gains in the electrical, plumbing, heating and air-conditioning equipment and supplies industry (+4.1%).

The food, beverage and tobacco subsector (+1.8%) posted a second consecutive monthly increase, mainly due to higher inventories in the food industry (+2.0%).

The machinery, equipment and supplies subsector (+0.6%) rose for the fifth time in seven months, on the strength of the farm, lawn and garden machinery and equipment industry (+1.5%).

The lone subsector to decline in July was motor vehicle and parts, down 0.8% following three consecutive monthly gains.

The inventory-to-sales ratio was unchanged at 1.36 in July. The ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current levels.

StatsCanada

Canada: International transactions in securities, July 2018

Foreign investment in Canadian securities reached $12.7 billion in July, mainly from acquisitions of federal government bonds. At the same time, Canadian investment in foreign securities totalled $13.1 billion, led by record purchases of foreign bonds.

Foreign investment in federal government bonds resumes

Foreign investment in Canadian securities reached $12.7 billion in July, up from $10.3 billion in June. Overall, foreign investors acquired Canadian bonds and, to a lesser extent, equities, but reduced their exposure to money market instruments.

Non-resident acquisitions of Canadian bonds totalled $11.1 billion in July. Foreign investors acquired $5.2 billion of federal government bonds. This was the first monthly investment this year. From January to June, foreign divestment in federal government bonds totalled $33.9 billion. Non-resident investors also added $3.8 billion of private corporate bonds to their holdings in July, the lowest level since January. Canadian long-term interest rates were up by 22 basis points in July. The Bank of Canada raised its benchmark overnight interest rate by 25 basis points to 1.5% in July, the second increase so far this year. In general, interest rates and bond prices move in opposite directions.

Foreign investors reduced their holdings of Canadian money market instruments by $379 million in July, the fourth consecutive month of divestment. Lower foreign holdings of federal government and federal government enterprise paper was moderated by investment in private corporate paper. Canadian short-term interest rates were up by 15 basis points and the Canadian dollar appreciated slightly against its US counterpart in the month.

Foreign investment in Canadian equities increased to $2.0 billion in July from $1.4 billion the previous month. The investment activity was concentrated in listed shares in the month. Canadian stock prices edged up in July.

Canadian investors acquire foreign bonds at a record pace

Canadian investment in foreign securities totalled $13.1 billion in July, following an $11.2 billion investment in June. Purchases of debt instruments were moderated by sales of equities in the month, an investment pattern generally observed since March.

Canadian investment in foreign debt securities reached a record $13.9 billion in July. Acquisitions of non-US foreign bonds and US Treasury bonds were the main contributors. Canadian investors acquired $44.9 billion of foreign bonds from January to July, with nearly 90% in instruments denominated in foreign currencies. These acquisitions mainly targeted bonds issued by foreign governments. The level of investment in 2018 has already surpassed the record investment for one year set in 2006 ($43.8 billion). In 2006, acquisitions were mainly in foreign bonds denominated in Canadian dollars, also referred to as maple bonds, as foreign corporations were active raising funds in the Canadian credit market prior to the global financial crisis. US short-term interest rates were up by five basis points, while US long-term rates declined slightly in July.

Canadian investors reduced their holdings of foreign shares by $796 million, the fourth divestment in five months. The reduction largely targeted non-US foreign shares in July.

StatsCanada

Loonie hanging tough against the crosses, forget USD/CAD

CAD ‘bulls’ are looking to the crosses for some early week wins, especially GBP (£1.6766) and EUR (€1.4980) and will avoid the pain of the long dollar positions in this ‘risk off’ emerging market debacle.

Demand for the U.S dollar does not look like slowing down any time soon and with three-month U.S T-Bills at +2% certainly makes the ‘long’ dollar position the safe haven of choice.

From a technical perspective, the EUR now trading through the €1.1500 outright now looks more vulnerable, especially if the market begins to focus any further negative attention on Italy in respect to its exposure to Turkey and by the country’s 2019 budget process.

GBP/CAD has fallen to around £1.6767 from around £1.7037 since the Bank of England increased the interest rate to +0.75% on Aug. 2, mostly due to the fact that the market has switched their attention to Brexit uncertainties and the possibility of a no-deal scenario.

Canadian fundamentals support the loonie on any sell-off

After last Friday’s employment numbers where Canada added a net +54.1K jobs in July on a seasonally adjusted basis and an unemployment rate ticking down to +5.8% adds to the probability the Bank of Canada (BoC) will hike the benchmark interest rate one more time in 2018. Don’t expect the BoC to stray too far away from the Fed’s rate normalization plan.

So, look to the loonie to fly against contagion angst EUR or a no-Brexit deal pound. Even positive Nafta rhetoric will support the currency’s crusade!

Canada: GDP by industry, May 2018

Real gross domestic product (GDP) was up 0.5% in May, after increasing 0.1% in April. The rise was widespread as 19 of 20 industrial sectors registered increases.

The output of goods-producing industries rose 0.6%, led by gains in mining, quarrying, and oil and gas extraction. Services-producing industries rose 0.5% as all sectors increased.

Mining, quarrying, and oil and gas extraction continues to grow

The mining, quarrying, and oil and gas extraction sector was up for the fourth month in a row in May, growing by 1.8%.

The oil and gas extraction sub-sector rose 2.5% in May, a sixth increase in seven months. Non-conventional oil was up 5.3% as crude bitumen extraction in Alberta increased following maintenance and capacity-expansion-related shutdowns at some facilities in April. Conventional oil and gas extraction was unchanged as growth in crude oil extraction was offset by a decline in natural gas extraction.

Mining excluding oil and gas extraction was up 0.6%. Metal ore mining increased 4.5%, in part due to a 7.1% rise at copper, nickel, lead and zinc mines, the first gain after eight months of declines. Non-metallic mineral mining contracted 4.1% due to lower output at diamond mines. Coal mining was up 1.6%.

Following four months of growth, support activities for mining and oil and gas extraction were down 2.2% in May on account of lower activity by drilling and rigging services.

Return to normal in many industries after unusual April weather

Industries affected by unusual weather conditions in April, including colder-than-normal temperatures across the country and an ice storm across Central and Eastern Canada, mostly had offsetting changes in May.

After a 1.0% decline in April, retail trade rose 2.0% in May, the largest increase since October 2017. There were notable increases in activity at motor vehicle and parts dealers and in store types associated with springtime activities such as building material and garden equipment and supplies dealers, clothing and clothing accessories stores and general merchandise stores.

Construction increased 0.7% in May, essentially compensating for April’s decline. Residential building construction (+1.3%) and repair construction (+1.5%) were both up after decreases in April. Non-residential building construction declined 0.5% after posting gains for the six previous months.

Following 1.4% growth in April to meet increased demand for heating due to colder-than-usual temperatures, the utilities sector contracted 2.4% as warmer and spring-like weather conditions returned across the country. Electric power generation, transmission and distribution contracted 3.0%, while natural gas distribution edged up 0.1%.

The food services and drinking places sub-sector was up 0.9%, after a 1.1% decline in April.

Wholesale trade up

Wholesale trade was up 1.4% in May. The largest increase in terms of output came from building material and supplies wholesaling (+4.4%) as there was increased demand for lumber and millwork products. Miscellaneous wholesaling rose 5.0%, mainly from higher sales of agricultural supplies. Motor vehicle and parts wholesaling (-1.0%) was down for a second consecutive month as both imports and exports of motor vehicles decreased.

Manufacturing edges up

The manufacturing sector edged up 0.1% in May, following a 0.8% increase in April when the real inventory-to-sales ratio was the highest since August 2009.

Non-durable manufacturing rose 0.9% as six of nine subsectors grew. Chemical manufacturing was up 4.5% from higher output of manufacturers of pharmaceuticals and medicines and pesticides, fertilizers and other agricultural products. Petroleum and coal products declined 0.6% as shutdowns initiated in April at several refineries for maintenance and retooling work continued.

Durable manufacturing declined 0.7% as its 10 subsectors were evenly split between increases and decreases. Transportation equipment (-2.5%) led the decline as five of seven industry groups contracted. Fabricated metal products decreased 4.8%, following three months of increases. Machinery manufacturing (+2.5%) had the largest increase in terms of output.

Offices of real estate agents and brokers down for the fourth time in five months

Activity at the offices of real estate agents and brokers was down 2.7% in May, in part due to declining home sales in British Columbia. This was the fourth decline since the beginning of 2018.

Other industries

The professional, scientific and technical services sector rose 0.5% in May. Most industries recorded an increase, led by growth in computer systems design and related services (+1.5%).

The finance and insurance sector grew 0.4%, led by a 0.6% increase in depository credit intermediation. Financial investment services (+0.4%) and insurance carriers and related activities (+0.2%) also increased.

Transportation and warehousing services were up 0.4%, led by increases in truck (+0.6%) and rail (+1.2%) transportation. Pipeline transportation edged down 0.2% as natural gas transportation declined, while crude oil transportation rose.

The public sector edged up 0.1%, as health care and social assistance rose 0.3%. Public administration and educational services were essentially unchanged.

StatsCanada

Canada: Wholesale trade, May 2018

Wholesale sales rose 1.2% to a record $63.7 billion in May. Sales were up in four of seven subsectors, representing approximately 50% of total wholesale sales.

The miscellaneous, building material and supplies, and farm product subsectors contributed the most to the gains in May, while the motor vehicle and parts subsector posted the largest decline.

In volume terms, wholesale sales increased 1.3%.

Sales increase in four of seven subsectors, led by the miscellaneous and the building material and supplies subsectors

In dollar terms, the miscellaneous subsector reported the largest increase in May, as sales rose 7.8% to $8.3 billion. Sales were up in four of five industries, led by the agricultural supplies industry (+25.6%) following a 5.4% decline in April. In volume terms, the agricultural supplies industry increased 27.4%.

Sales in the building material and supplies subsector rose 5.0% to $9.7 billion as all industries posted gains in May. Much of May’s increase was attributable to higher sales in the lumber, millwork, hardware and other building supplies industry, up 7.3% to $4.9 billion. This was the third consecutive increase for the industry and the highest sales level since July 2017. In volume terms, the industry increased 6.8%, indicating that the gain in the current dollar series was partly price driven. In May, international merchandise trade reported gains in both imports and exports of building and packaging materials.

Following a 17.5% decline in April, the farm product subsector rebounded in May, up 25.5% to $859 million. This was the third increase in four months and the highest level since November 2017. A 28.5% increase in volume terms signifies that price changes had no impact on the growth seen in the current dollar series. Exports of farm and fishing products increased in May.

The motor vehicle and supplies subsector recorded the largest decline in dollar terms in May, down 2.5% to $11.1 billion. This was the second consecutive monthly decline and the fifth drop in six months, bringing the subsector to its lowest level since December 2016. The sole contributor to the decrease was the motor vehicle industry, down 3.7% to $8.9 billion. Imports and exports of passenger cars and light trucks as well as manufacturing sales of motor vehicles declined in May.

Sales increase in eight provinces

Sales were up in eight provinces in May, accounting for 49% of total wholesale sales in Canada. Higher sales in the western provinces led the gains. In dollar terms, Alberta contributed the most to the increase, more than offsetting the decline reported in Ontario.

Alberta reported its fifth increase in six months, with sales rising 6.7% to $7.3 billion, their highest level on record. Sales were up in six subsectors, led by the miscellaneous subsector (+26.7%). The agricultural supplies industry within the miscellaneous subsector contributed the most to the gains.

Sales in Saskatchewan increased for the third consecutive month, up 9.8% to $2.3 billion—the highest level since December 2016. The miscellaneous subsector (+17.2%) led the gains, with the agricultural supplies industry contributing the most to the increase.

In British Columbia, sales grew 1.9% to $6.7 billion, its third consecutive gain. The gains were led by the machinery, equipment and supplies subsector (+11.4%), more than offsetting the 10.2% decline in April.

Sales in Nova Scotia rose 9.0% to $962.3 million, driven by gains in the food, beverage and tobacco subsector (+38.8%).

Ontario posted its second consecutive monthly decline in May, down 0.9% to $32.1 billion. The motor vehicle and parts (-4.6%) and the food, beverage and tobacco (-6.5%) subsectors led the decrease. The motor vehicle and parts subsector was down for the second consecutive month, while the food, beverage and tobacco subsector declined for the second time in four months.

Wholesale inventories increase for the second consecutive month

Wholesale inventories rose for the second consecutive month, up 1.4% to a record $84.0 billion in May. Five of seven subsectors posted increases, representing 90% of total wholesale inventories.

In dollar terms, the machinery, equipment and supplies subsector (+1.6%) posted the largest gain, following a 0.3% decline in April. Three of four industries increased, with the other machinery, equipment and supplies industry contributing the most to the upturn.

Inventories grew 2.7% in the miscellaneous subsector, a third consecutive monthly gain. Increases were reported by all five industries and were led by increased stock in the other miscellaneous industry (+4.0%).

The building material and supplies subsector (+2.0%) rose for the third consecutive month, on the strength of higher inventories in the metal service centres (+3.8%) and the lumber, millwork, hardware and other building supplies (+1.6%) industries.

Higher inventories in the motor vehicle and parts subsector (+2.0%) were led by increased stock in the motor vehicle industry (+2.9%).

The inventory-to-sales ratio increased from 1.31 in April to 1.32 in May. This ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.

StatsCanada

Canada: Inflation Hit Six-Year-Plus High

The Consumer Price Index (CPI) rose 2.5% on a year-over-year basis in June, following a 2.2% increase in May. This is the largest year-over-year increase in the CPI since February 2012.

This month’s year-over-year CPI increase follows a year of gradual acceleration in consumer price inflation, from a recent low of 1.0% year over year in June 2017. This trend reflects increases in prices for gasoline and food purchased from restaurants, as well as offsetting factors such as lower price inflation for electricity and telephone services. These movements coincide with recent improvements in the economy and the labour market, as well as an increase in oil prices.

Component highlights

Seven of eight major components rose year over year. The transportation index (+6.6%) was the largest contributor to the year-over-year increase, while the household operations, furnishings and equipment index (-0.1%) was the lone major component to decline.

Energy costs were 12.4% higher compared with June 2017, after increasing 11.6% year over year in May. Year-over-year gains in prices for gasoline (+24.6%) and fuel oil and other fuels (+25.9%) were larger in June than in May, as sustained increases in crude oil prices and exchange rate pressures continued to impact consumer prices. Prices for durable goods rose 0.6% year over year, led by growth in the purchase of passenger vehicles index (+1.8%). This gain is attributable to lower rebates on 2019 model-year vehicles.

Year-over-year gains in the price of services were lower in June (+2.2%) than in May (+2.3%), moderating the growth in the CPI. Prices for telephone services (-8.8%) continued to decline year over year, amid a series of industry-wide price promotions. Consumers paid 8.4% less for travel tours compared with June 2017. The homeowners’ replacement cost index increased less on a year-over-year basis in June (+1.4%) than in May (+2.0%).

Regional highlights

Prices rose more in six provinces in June on a year-over-year basis compared with the previous month. This growth was strongest in Prince Edward Island, where prices increased 2.9%.

The CPI in Newfoundland and Labrador rose 2.3% in June. Gasoline prices were up 16.5% in the 12 months to June after increasing 5.5% the previous month.

Seasonally adjusted monthly Consumer Price Index

On a seasonally adjusted monthly basis, the CPI rose 0.1% in June, matching the increase in May. Six of eight major components increased, while the household operations, furnishings and equipment index (-0.3%) and the recreation, education and reading index (-0.6%) both declined.

StatsCanada

Canada: Retail trade, May 2018

Retail sales increased 2.0% in May to $50.8 billion, following a 0.9% decline in April. Sales rose in 8 of 11 subsectors, representing 70% of retail trade.

Higher sales at motor vehicle and parts dealers and at gasoline stations were the main contributors to the gain in May. Excluding these two subsectors, retail sales were up 0.9%.

After removing the effects of price changes, retail sales in volume terms increased 2.0%.

Sales rebound in several subsectors

Sales at motor vehicle and parts dealers (+3.7%) made almost a full rebound following a 3.8% decline in April, which had unseasonably cool temperatures and inclement weather in many parts of the country.

Receipts at gasoline stations (+4.3%) were up for the second month in a row, partially reflecting higher prices at the pump. Sales in volume terms at gasoline stations rose 2.7%.

General merchandise stores (+3.2%), building material and garden equipment and supplies dealers (+5.4%) and clothing and clothing accessories stores (+2.8%) also contributed to the gain. Increases in each of these subsectors more than offset the declines that had been reported in April.

Food and beverage stores (-2.1%) posted a sales decline for the fourth time in five months. The decrease in May was primarily due to lower sales at supermarkets and other grocery stores (-3.1%).

According to the Retail Commodity Survey, 20.6% of food sales took place at general merchandise stores in the first quarter of 2018 compared with 19.1% in 2017. During the same period, 75.1% of food sales came from the food and beverage stores subsector, down from 76.5% in 2017.

Higher sales in seven provinces, led by Ontario and Quebec

Seven provinces reported higher sales in May, with Ontario and Quebec more than offsetting their declines from April.

Sales in Ontario (+2.6%) increased for the fourth time in five months. Higher sales at motor vehicle and parts dealers accounted for the majority of the increase in May. Sales in the Toronto census metropolitan area (CMA) were up 1.4%.

In Quebec, sales increased 3.0%, following a 2.6% decline in April. Sales were up 1.4% in the Montréal CMA.

E-commerce sales by Canadian retailers

The figures in this section are based on unadjusted (that is, not seasonally adjusted) estimates.

On an unadjusted basis, retail e-commerce sales totalled $1.4 billion, representing 2.5% of total retail trade. On a year-over-year basis, retail e-commerce rose 16.9%, while total unadjusted sales increased 5.5%.

StatsCanada

Bank of Canada Expected to Hike on Wednesday

The US dollar is mixed against majors on Tuesday. The JPY has lost as risk appetite is back in vogue with investors and the GBP has risen after the market digested the resignations of pro-Brexit members of Theresa May’s government. The Bank of Canada (BoC) will publish its rate statement on Wednesday, July 11 at 10:00 am EDT. The market has priced in a 96 percent chance of an interest rate hike. BoC Governor Stephen Poloz will host a press conference where he could offer further insight into the decision or hedge if market reaction is too extreme in his view.

  • Bank of Canada (BoC) expected to hike rate by 25 basis points
  • US Weekly crude inventories forecasted to drop after API drawdown of 6.8M barrels
  • Bank of England (BoE) Governor Carney to speak in Boston

Loonie Awaiting Bank of Canada Decision
The USD/CAD gained 0.05 percent on Tuesday. The currency pair is trading at 1.3114 ahead of the central bank meeting. Monthly Canadian GDP data at the end of June surprised to the upside and with a positive business outlook added to a strong jobs report the Canadian central bank will be looking to close the gap with the U.S. Federal Reserve funds rate. Fed members have signalled that more rate lifts are coming and two have already been priced in. The BoC is in no hurry to hike, but there is pressure to act later in the second half of the year if it decides to hold in July.


usdcad Canadian dollar graph, July 10, 2018

While the lift in interest rates will not be a surprise, there is more anticipation for what BoC Governor Stephen Poloz has to say. Hawkish comments from BoC Governor Stephen Poloz earlier in the month taken into consideration for the meeting, although the market is forecasts more dovish remarks given the uncertain global trade scenario. If Poloz maintains a neutral to hawkish there could be a sharp movement in the currency.

Commitment of Trades (CoT) data out of the CFTC shows large investors are bearish on the currency, which could create a short squeeze scenario all depending on what Poloz ends up communicating to the market.

The Canadian economy had a solid start to 2017, but the pace kept slowing down as the Trump administration attacks on trade were gaining steam. The uncertainty about trade made the start of 2018 a difficult one for the loonie and until recently the worst performer against the USD from major currencies.

Elections in Mexico and the upcoming midterms in the US make a NAFTA renegotiation less likely this year, which minimizes but does not take out of the equation an end of the trade deal. Fundamental indicators in Canada have improved giving the central bank some room to close the gap between the US and Canadian interest rates.

Yen on the Back Foot as Risk Appetite Returns

The USD/JPY lost 0.38 percent in the last 24 hours. The currency pair is trading at 111.27 a six month high for the USD against the JPY. The yen is a preferred safe haven during times of uncertainty, but as investors seek returns they quickly sell the Asian currency. Trade war fears have waned this week and emerging markets have been the biggest winners at the expense of the JPY.



Pound Rises as PM May Survives Leadership Challenge

The GBP/USD gained 0.18 percent on Tuesday. Cable is trading at 1.3279 on the midst of Theresa May fighting for a soft Brexit and her job. On Friday it all seemed to have worked out with little opposition for her plans of an orderly divorce with the EU that allowed the UK to have access to the single market. Hard Brexit backing members of the cabinet started resigning over the weekend. The pound started to drop as Boris Johnson resigned and concerns rose of a confidence vote against PM May. The fact that May has survived a leadership challenge and some encouraging comments out of Brussels have boosted the currency.



The Conservative party remains divided, but the Eurosceptics do not have enough fire power to topple May so for now a soft Brexit is the only viable strategy. May has the support from Michael Gove, but if that were to change it could mean her ouster, with Gove a likely replacement.

Market events to watch this week:

Wednesday, July 11
10:00am CAD BOC Monetary Policy Report
10:00am CAD BOC Rate Statement
10:00am CAD Overnight Rate
10:30am USD Crude Oil Inventories
11:15am CAD BOC Press Conference
11:35am GBP BOE Gov Carney Speaks
Thursday, July 12
7:30am EUR ECB Monetary Policy Meeting Accounts
8:30am USD CPI m/m
8:30am USD Core CPI m/m

*All times EDT
For a complete list of scheduled events in the forex market visit the MarketPulse Economic Calendar

USD/CAD – Loonie Rallies on Inflation Data

Statistics Canada data this morning showed that headline inflation in Canada slowed last month, while measures of underlying prices strengthened to their highest level in 18-months.

Canada’s consumer-price index rose +1.7% y/y in January, following a +1.9% advance in December.

Market expectations were for a +1.5% lift. On a month-over-month basis, prices rose +0.7% in January versus an expected print of +0.4%.

Digging deeper, today’s report indicated underlying, or core, inflation strengthened in the month. Underlying prices rose in a range from +1.8% to +1.9%, for an average of +1.83% – the highest level since mid-2016. The average in the previous month was +1.76%.

The ‘loonie’ is up +0.51% against the U.S dollar, trading atop of C$1.2659. The CAD was trading north of C$1.2712 just before this morning’s release.