Loonie traders have a lot going for them this week with Canada’s data releases and a bunch of brewing market themes.
Which catalysts should you keep closer tabs on?
I’ve compiled a list for ya:
Quarterly GDP (Dec 1, 1:30 pm GMT)
- Canada’s GDP shrank by 11.5% and officially entered a recession in Q2 2020
- The economy is expected to have jumped by 10.0% in Q3 2020 as lockdown restrictions eased
- Annualized growth is expected to recover from -38.7% to +46.0%
Labor market numbers (Dec 4, 1:30 pm GMT)
- Canada added a net of 83,600 jobs in October with most of the additions made in full-time jobs
- The unemployment rate dipped from 9.0% to 8.9% for the month and marked its fifth consecutive monthly decline
- CAD got an extra boost from the positive jobs numbers though it gave up some of its gains by the end of the day
- Analysts see the economy adding a net of 60,000 jobs in November
- The unemployment rate may have improved further to 8.8% for the month
Other lower-tier releases
- Current account deficit (Nov 30, 1:30 pm GMT) could have widened in Q3 2020
- Markit’s manufacturing PMI (Dec 2, 2:30 pm GMT) is seen dipping from 55.5 to 55.3
- Trade deficit (Dec 4, 1:30 pm GMT) to widen to 3.5B CAD as imports outpace exports in October
OPEC meetings
- On Monday and Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) and its other oil-producing friends will decide whether they will go through with the planned output increase for three to six months starting January
- OPEC+ members have to balance trends of the pandemic hitting fuel demand and their optimism over the vaccines available by mid-2021 when the leaders next meet
- Word around is that Russia and a few others want to keep the output cut in place, while producers like UAE and Kazakhstan want to go ahead with production increase as scheduled
Overall CAD demand
- Rising coronavirus cases in the U.S. is limiting Canada’s recovery prospects
- Unless this week’s data releases surprise to the upside or downside, CAD will most likely dance to the tune of risk sentiment
Technical snapshot
- RSI is flagging CAD’s “oversold” conditions against NZD
- The Loonie may soon hit “overbought” status against the dollar
- CAD/CHF, CAD/JPY EUR/CAD, and GBP/CAD are mostly in neutral territory
- SMAs show CAD’s short and long-term bearish trends against AUD and NZD
- The Loonie is seeing short and long-term bullish trends against the dollar and yen
- We may soon see retracement or reversal opportunities on CAD/CHF and GBP/CAD
- CAD/JPY, GBP/CAD, CAD/CHF, and USD/CAD were the four most volatile major Loonie pairs in the last month
Missed last week’s price action? Read CAD’s price recap for Nov. 23 – 27!
