Wednesday’s session finally abounds in an increased amount of macroeconomic data. The most important time of the day will be 16:00, when the Bank of Canada will summarize its monetary policy meeting. Be cautious when trading on CAD.

Relevant data from China

Before we get into today’s events, let’s pause for a moment at what happened during the night. We got the result of Chinese retail sales, industrial production and GDP on an annual basis and quarterly. The results presented are as follows:

  • Retail Sales YoY: 10.7% vs. 10.6%, previously 10.6%
  • Industrial Production YoY: 6.1% vs. 6.4%, previously 6.3%
  • GDP YoY: 6.7% in line with expectations and the result of the previous
  • GDP MoM: 1.8% in line with expectations and the result of the previous

What data to track during Wednesday’s trading

We will start at 10:30 from the report of the British labour market. Half an hour later – at 11:00 we will know the results of the economic situation of the European construction sector.

For further information we will have to wait until 14:30, when normally appear macroeconomic publications from the United States. This time we will know Housing starts and Building permits.

The most important event of the session – as previously mentioned – will be meeting of Bank of Canada and the publication of the monetary report at 16:00. Half an hour later, we’ll know the EIA Crude Oil Stocks change from US.

At the end of the day, at 20:00 the Federal Reserve will publish its Beige Book. The publication collects subjective economic forecasts from various regions of the country allowing to assess the economic sentiment from a business perspective.

Will Bank of Canada lower the forecast?

Wednesday’s decision of the Bank of Canada (BoC) will be focused primarily on economic projections and guidance regarding the future path of monetary policy. Analysts do not expect movement within monetary policy. All 25 economists polled by Reuters news agency claimed that the rate of 0.50% will be maintained.

Looking at the following screen we see that under present situation on the markets it’s hard to expect any movement on rates in the near future:

canada-boc-rate-move-probabilities

Much more important will prove to be updated economic forecasts. And on them we should pay attention. Any changes to the projections given in July may influence on movements of the Canadian dollar.

As for the notation of USDCAD – on the popular Loonie situation did not change much from the first half of the year. All the time we are in limited in time narrowing triangle formation, from which we will have to break out sooner or later – the question is in which direction:

usdcaddaily-19-10

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