Loonie Range Bound Ahead of Poloz Speech

Tuesday, June 26, 2018

 

The loonie is trading flat with a lack of domestic data and markets digesting the impact of the inflation and retail sales number misses from Friday. All focus will be on Stephen Poloz and his speech on Central Bank transparency and trust tomorrow. He may give insight into the Bank of Canada’s monetary plan for 2018. An interest rate increase on July 11 was priced at nearly 80% a few weeks ago but is now down to 50% today. Friday’s GDP and Bank of Canada Business Survey numbers will also be important numbers. Trade war risks have subsided for now but remain a considerable headwind for Canada (and all economies involved).

 

US Consumer confidence fell in June, missing expectations, to 126.4 from 128.8 in May. This is still a good release and shows the average American household is optimistic about the US economy. The US dollar is marginally up versus most pairs. Federal Reserve member Raphael Bostic speaks later in the day and may give up clues as to the FOMCs next rate move.
 
There was no economic releases out of the Eurozone this morning leaving the Euro open to external forces. It seems overall political risk has subsided and focus will now be on data and the future of the ECB asset buying program. There are several second tier economic releases Wednesday through to Friday.
 
Markets are up slightly today with the up Dow 0.06%, the S&P up 0.08%, NASDAQ up 0.021% and the TSX up 0.33%.  Crude oil is up 0.41% ($68.36) and Gold is down 0.63% ($1,260.90).

 

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