CAD: Big week for Canada – RBC CM

Research Team at RBC Capital Markets, suggests that it is a big week for Canada with number of key economic releases.

Key Quotes

“First up is the August trade report; We look for an improvement in the nominal trade deficit to -CAD2bn (prev -CAD2.5bn) and the y/y comp for non-energy export volumes is pretty easy. But there is an underlying theme of disappointing export performance.

On Friday, we get a key input to the BoC’s October MPR – the Q3 Business Outlook Survey (BOS) will provide an update on CA business conditions. The Q1 survey showed the boost from foreign demand “remained insufficient to outweigh the continued drag from commodity-related activity combined with modest domestic demand”. We will be looking closely at: (1) the outlook for external demand, (2) investment intentions (which were still “cautious” in Q2) and (3) any evidence of fiscal expansion feeding through.

Finally, Friday also sees Sept labour data. Our economists look for a 10K increase but Sept has been volatile due to changing summer layoff practices in education. Bigger picture, the economy has only created 40K jobs in the first eight months of 2016, while full-time employment is actually down 12K ytd. Moreover, the weekly wage rate for permanent employees has fallen to just 1.5% y/y.”