For the first time in quite a while, Canada posted a disappointing result yesterday with a -1.8% slide in June Manufacturing Shipments. Obviously, considering the sound performance over the previous three months, it is difficult to draw any conclusions. This morning at 8:30, we will see updated inflation data for the country. It should be noted that in market logic, “presence of inflation” means “potential rate increase.”
In contrast, the minutes of the most recent European Central Bank (ECB) meeting were the big currency market mover yesterday due to a comment that ECB officials were concerned about the impact of the strength of the euro. The remark had some measure of success, as it quickly drove the single currency down in favour of the loonie, among other currencies.
As we are seeing this morning, the effectiveness of this tactic can be short-lived, with the euro having regained a large portion of the lost ground. It would, therefore, not be surprising for ECB members to give it another shot in the near future. The Jackson Hole Economic Symposium on August 25 could be an excellent opportunity.
Stéphane Goulet
Range of the day: 1.2595-1.2710