Canadian manufacturing sales disappoints, serves as catalyst for further CAD plunge
Monetary Policy Statement: Being primary tools the BOJ uses to communicate with investors about monetary policy. We would be listening for outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. We expect the BOJ to give clarification on its intention towards extending the lending program designed to provide low-interest loans for financial institutions, intended to boost lending, in order to supplement monetary easing and stimulate demand for funds among businesses. The BOJ plans to discuss prolonging the measure by a year beyond the March 31 projected end date with a final decision to be made in the Feb. 17-18 meeting.
Average Earnings Index 3m/y: The price businesses and the government pay for labor, including bonuses is expected to change from rise from 1.4% to 1.7%. This is important as a leading indicator of consumer inflation – when businesses pay more for labor the higher costs are usually passed on to the consumer.
Claimant Count Change: Its an early indication of the unemployment situation, released a month earlier than the Unemployment Rate. A change from 26.9k to 24.2k is expected.
MPC Official Bank Rate Votes: This will be significantly watched by investors to see the level of unity in the committee, in the wake of significantly low inflation in the UK, coupled with the falling oil prices. The 2-0-7 votes are expected to remain.
Building Permits: an excellent gauge of future construction activity because obtaining a permit is among the first steps in constructing a new building, forecasted at 1.06M.
Wholesale Sales m/m: Change in the total value of sales at the wholesale level is forecasted for 0.2%, a potential 0.1% increase from the previous month figure.
BOC Monetary Policy Report: As usual, it provides valuable insight into the bank’s view of economic conditions and inflation – the key factors that will shape the future of monetary policy and influence their interest rate decisions. In this meeting, the BOC will likely address its employment situation, which will likely add pressure to an already weak CAD as we saw Manufacturing sales declined 1.4% in November to $51.5 billion, reflecting lower sales of motor vehicles, chemicals, primary metals and food. This marked the third decrease in four months.
Overnight Rate: The Interest rate at which major financial institutions borrow and lend overnight funds between themselves is expected to remain at 1.00%, rate decision is often priced in the market hence we expect no major effect from the CAD expect we get a surprise announcement which is very unlikely.
BOC Press Conference: Majorly, we would be listening for answers given to questions as by the media since this answers are usually unscripted and could move markets