Summary:

  • Inflation and retail sales reports from the Canadian economy are likely to shake the CAD
  • US durable goods along with new home sales are going to be the sole macroeconomic readings from the US
  • Baker Hughes is going to release its weekly update on oil rigs

The last trading day brought an avalanche of declines across global equity markets following the tariffs announced by US President Donald Trump on Thursday. However, focusing on today’s calendar one may notice that market attention should be paid elsewhere – to the Canadian dollar which is going to witness a possibly volatile day. Apart from the Canadian set of releases there will be some prints from the US as well as a weekly update on oil rigs published by Baker Hughes.

12:30 pm BST – Canadian inflation and retail sales: The Loonie has been the best performing major currency so far this week being buoyed by promising revelations coming from NAFTA talks. The USDCAD made a major breakout last week, however, it could turn out to be a false one if today’s set of the data beats expectations reinvigorating odds for another rate hike (the OIS-implied probability points to 55% for such a move in May). In this respect inflation seems to be placed among the salient macroeconomic readings. The consensus indicates 2% yoy in February meaning an increase from 1.7% yoy seen in the first month this year. In turn, retail sales should rise 1.1% mom and 0.9% mom (excluding auto).

12:30/2:00 pm BST – US durable goods/new home sales: There is no doubt that major focus is likely to be on the trade thread, this is especially true as durable goods and new home sales data appear to be second-tier readings (of course they do matter, however, they rarely shake markets). Given that existing homes sales surprised to the upside one may expect a positive outcome in this category as well. The median estimate points to 622k which would be a decent rise from 593k seen in January. In terms of durable goods they are forecast to come in at 1.5% mom and 0.5% mom for the headline and the core measure respectively (both are expected to bounce back compared to the first month of 2018).

5:00 pm BST – Oil rigs count by Baker Hughes: The last time Baker Hughes reported a bump of US oil rigs to 800, the highest level since April 2015. Over the course of the recent weeks oil prices have been trapped in a broader consolidation which could in theory make US drillers more cautious with regard to launching new oil rigs. However, given some delays one may expect that a count should be gradually rising in the weeks to come as oil prices are unlikely to experience a more severe sell-off any time soon.

Central bank speakers scheduled for today:

  • 12:10 pm BST – Fed’s Bostic
  • 12:30 pm BST – BoE’s Vlieghe
  • 2:30 pm BST – Fed’s Kashkari and Kaplan

link do file download linkAfter a major breakout the USDCAD has a chance to reverse it, however, a substantial improvement in the data is needed to do so. Source: xStation5