The Canadian dollar has ticked higher in the Tuesday session. Currently, USD/CAD is trading at 1.2810, down 0.08% on the day. On the release front, Canada releases Wholesale Sales, which is expected to edge higher to 0.6%. The US will release Existing Home Sales, with an estimate of 5.42 million. As well, Fed Chair Janet Yellen will speak at an event in New York City. Wednesday is busy, as the US releases employment, durable goods and consumer confidence reports. Also, the Federal Reserve releases the minutes of its November policy meeting.
Like its southern neighbor, Canada continues to grapple with low inflation levels. There were no surprises on Friday, as CPI posted a negligible gain of 0.1% for October, matching the estimate. The Bank of Canada remains cautiously optimistic about inflation – on Wednesday, Senior Deputy Governor Carolyn Wilkins said she expected wages to rise as the economy improved. Inflation levels remain well below the Bank’s inflation target of 2.0%, and the markets don’t expect another rate hike until 2018.
Will we see a triple sweep from housing indicators? The markets are forecasting that Existing Home Sales will improve in October, following sharp housing data on Friday. Building Permits for single-family homes jumped to 1.30 million, above the estimate of 1.25 million. The annualized pace of 839,000 building permits in October was the fastest since September 2007. Housing Start also sparkled, accelerating to 1.29 million, compared to an estimate of 1.19 million. The catalyst for the strong numbers were hurricanes Harvey and Irma, which caused massive damage in the southern part of the US. With rebuilding efforts well underway, construction numbers should remain strong in the fourth quarter, which is good news for the US economy.
