Chancellor Angela Merkel’s centre-right party not surprisingly won a fourth mandate to lead Germany. However, elections were marked by a breakthrough for the anti-immigration Alternative for Germany (AfD) movement, which earned 12.8% of the votes and will take part in the soon-to-be formed coalition government. To a lesser extent, this result is reminiscent of the protest votes that have been seen in other western countries toward established parties. The EUR lost ground against both the CAD and the USD on the news.
Last Friday, Canadian inflation numbers for August came in slightly below expectations at an annualized 1.4%, after markets had called for 1.5%. However, it is interesting to note that the shelter costs component (26% of the CPI) was up, a first since the spring and an encouraging sign for upcoming CPI readings in Canada. The Canadian dollar closed out the week down slightly against its U.S. counterpart.
Today, we will be paying close attention to speeches by U.S. Federal Reserve Governors and European Central Bank President Mario Draghi. Later this week, we will also be keeping an eye on Canadian GDP on Friday and the third round of NAFTA talks in Ottawa.
Alexis Masson
Range of the day : 1.2240 – 1.2400