The main event in the European session was the UK employment report. The data was much better than expected, particularly on wage growth, and the GBP got a boost from that. In terms of market prices it should not change much as the BoE is widely expected to keep the Bank Rate unchanged this week. In the American session, Canadian CPI and US Retail Sales will take notice.
13:30 GMT/08:30 ET – Canada November CPI
The CPI Y/Y in Canada is expected to be 2.0% vs. 2.0% before, and the M/M figure is seen at 0.1% vs 0.4% before. The CPI Y/Y Trimmed-Mean is expected at 2.6% vs. 2.6% before, and the Average CPI Y/Y is seen at 2.4% vs. 2.5% previously.
The recent BoC drop the line stating that “if the economy changes substantially in line with our latest forecast, we expect to reduce the policy rate further”, which indicates that we reached the peak in “dovishness” and the central bank will now turn to 25 bps cuts and slow the pace of easing.
Canadian Inflation Measures
13:30 GMT/08:30 ET – US November Retail Sales
M/M US Retail Sales is expected at 0.5% vs. 0.4% previously, while the M/M ex-Autos measure is seen at 0.4% vs. 0.1% previously. The focus will be on the Control Group M/M figure which is expected at 0.4% vs -0.1% previously.
Consumer spending has been steady which is what you would expect given the positive real wage growth and stable labor market. We have also seen a strong increase in consumer sentiment/confidence reports which indicate that the financial situation of consumers is stable/improving.
US Retail Sales YoY
Central bank speakers:
- 09:00 GMT – ECB's Rehn (neutral – vote)
