A number of key fundamentals are set for release on Thursday. What’s on the calendar, and how might it affect the markets?
Canadian Consumer Price Index
One hour shy of the US market open, Statistics Canada will report the nations latest inflation data. The tow headline figures are the core CPI (MoM) and the CPI MoM. Both figures represent the change in price over time of a basket of goods and services, with the difference between the two being that the core release excludes food and energy from its calculation. With the Bank of Canada reporting its unchanged interest rate decision on Wednesday, the market reaction to this latest round of inflation data may be somewhat muted. However, expect a large surprise to generate a certain amount of volatility and perhaps dictate the intraday direction of the major Canadian dollar pairs. Consensus forecasts the core and non core figures at 0.3% and 0.4% respectively, so expects downside miss to weaken the Canadian dollar and, conversely, an upside surprise to strengthen the currency.
Philadelphia Fed Manufacturing Index
Mid-US morning the Philadelphia Federal Reserve will release its monthly manufacturing index data. The index represents the relative level of business conditions across the state, and is generally considered a leading indicator of economic conditions in the US as a whole. For this reason, and surprises in the release will generally spark considerable volatility in the value of the USD. With Fed Chair Janet Yellen not being particularly clear of late as to the likely future of US monetary policy, traders are watching these sorts of releases very carefully to gain insight. The index is forecast at 10.0, suggesting improving conditions and a small gain on the previous release of 9.0. Look for a downside miss to serve up a bearish intraday directional bias in all of the major US pairs and, conversely, an upside surprise to strengthen the USD across the board.
To contact the reporter of this story: Samuel Rae at Samuel@forexminute.com