The Loonie was the clear winner among the major currencies this week, benefitting from a broadly positive risk environment and rising oil prices, while ignoring mostly disappointing economic updates from Canada.
Canada Headlines and Economic data
Monday:
Consumer Sentiment in Canada Stalls; 51% Say Economy Will Weaken
Oil rebounds on Trump health update, Norway shutdowns
Tuesday:
Volatility and negative risk sentiment picked up quickly in the financial markets after U.S. President Donald Trump halted Covid-19 relief aid talks until after election.
Wednesday:
Global markets shifted back into risk-on mode after U.S. President Donald Trump reversed on his call to end work on a stimulus package, calling for Congress to aid the U.S. airline industry. This is where we saw the Loonie start its broad rally higher for the week to eventually take the top spot among the major currencies.
Canada Ivey PMI falls to 54.3 in Sept vs. 67.8 in August (seasonally adjusted) – Employment index fell from 56.1 to 53.8, Prices Index rose from 57.6 to 60.3
Oil falls on U.S. stimulus impasse and U.S. stockpiles
Thursday:
Canadian housings starts came in at 208,980 units in September, a decrease from the August read of 261,547 units – CMHC – this read was also below expectations of around 240K units.
Bank of Canada head says pandemic response will boost risks from future economic shocks – “Macklem also said the Bank of Canada was keeping a close eye on household debt levels and Canada’s housing market, both of which were vulnerabilities coming into the pandemic.”
Friday:
Bank of Canada not actively discussing but doesn’t rule out negative rates
Canada added 378,000 mostly full-time jobs in September, as COVID-19 cases spiked – “The strong month brings the unemployment rate down to 9 per cent from 10.2 per cent. It also brings the job market to within 720,000 jobs of its February pre-pandemic level.”
