Research Team at TDS, suggests that the seasonal factors in Canada are anticipated to drive a stronger CPI print.

Key Quotes

“A depreciating currency and falling commodity prices will do battle once again to determine the net impact on February CPI. While lower energy prices will exert a drag, the former influence paired with strong seasonal adjustment factors will carry the day.

The headline price index is forecast to have increased by 0.4% m/ m (after controlling for seasonality, headline prices are expected to fall by 0.2%). Much of this gain reflects the influence of higher recreation and clothing prices. And while the currency did recover from its January trough, in level terms the CAD remained low through all of February which reduced the incentive for firms to pass along the savings to consumers.

A strong base year effect will pull headline inflation lower to 1.6% as energy prices increased by nearly 7.0% last February. The non-seasonally adjusted core price index should be similarly well-supported, rising by 0.6% m/m while the index will show a far more modest 0.2% monthly gain after accounting for seasonality. On a year ago basis, core inflation is expected to nudge a touch higher to 2.1% in February.”

Research Team at TDS, suggests that the seasonal factors in Canada are anticipated to drive a stronger CPI print.

(Market News Provided by FXstreet)

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A sharp impulsive bullish move in GBP/USD pair failed once again in Asia to chew through offers placed around 1.45 levels, although losses remain capped as markets have turned bearish on USD. Trades below 76.4%Prices currently trade just below 1.4472 (…

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Lasse Holboell Nielsen, Research Analyst at Goldman Sachs, notes that the Norges Bank cut is policy rate by 25bp, in line with their and the consensus expectation (Cons, GS: +0.50%).

Key Quotes

“Norges Bank revised down its policy rate path by around 10bp-20bp over the next two years, not much different from our expectations, but by around 50bp by end-2018, somewhat more than we anticipated. (We highlighted a hawkish risk ahead of the today’s decision and the immediate market response was for the Krone to strengthen by around 0.5%.)

Overall, we find yesterday’s decision to be on the dovish side given the large downward revision for 2018 despite the more moderate (as expected) revisions to domestic growth and inflation. Norges Bank’s path now indicates a base case of a 25bp cut in 2016 (with moderate additional downside risk) and its statement indicates that rates can go negative, should a significant shock hit the Norwegian economy (we do not find this statement particularly surprising).

We continue to expect Norges Bank to remain on hold in the coming quarters following yesterday’s cut (despite Norges Bank’s downward-sloping path).”

Lasse Holboell Nielsen, Research Analyst at Goldman Sachs, notes that the Norges Bank cut is policy rate by 25bp, in line with their and the consensus expectation (Cons, GS: +0.50%).

(Market News Provided by FXstreet)

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