What we’ll be watching: USD, CAD factors – NBF

Economists from the National Bank of Canada Financial Markets division have noted several key data points for both the US and Canadian markets next week that traders will want to make note of.

What we’ll be watching in the US & Canada

IN THE U.S., the main even (sic) will be the publication of September’s retail sales. Judging from previously released data on auto sales, motor vehicles and parts dealers should have contributed positively to the headline figure. Outlays at gasoline station may also have increased, reflecting higher pump prices. All told, we expect total sales to have risen 0.4%.

We’ll also get industrial production data for September. Manufacturing output may have shrunk in the month, hampered by the UAW strike which likely led to a drop in car production. Utilities may also have contributed negatively to the headline print after having been boosted by elevated temperatures in July and August. These declines could translate into a reduction of 0.5% in total industrial production.

We expect housing starts to have jumped to 1,440K in the month (seasonally adjusted and annualized), led by a sizeable increase in the multi-family segment.

Chairman Jerome Powell, for his part, will speak at the Economic Club of New York on Thursday. The latest version of the central bank’s Beige book will also be released.

IN CANADA, a retreat in gasoline prices, could have translated into a 0.1% decline of the consumer price index in September (before seasonal adjustment). If we’re right, the 12-month rate of inflation should come down from 4.0% to 3.8%.

August’s retail sales data will also attract a lot of attention. Gasoline station receipts could have jumped during the month, boosted by higher pump prices, but this may have been more than offset by a decrease in outlays in other categories, notably those related to housing. As a result, headline retail sales could have retraced 0.3%.

The week will also feature the release of August’s manufacturing sales. The latter could have increased 1.0% m/m, led by gains in the petroleum/coal products and food products subsectors.