Summary:
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Inflation and retail sales readings may shake Canadian dollar market
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Finance ministers and central bank presidents of G20 countries will meet in Buenos Aires this weekend
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General Electric is expected to report over $29 billion revenue
On the final trading day of the week investors will be offered just one top-tier macroeconomic reading. In the afternoon retail sales and inflation reports from Canada are scheduled for release therefore additional volatility on CAD tied FX pairs may spur. Apart from that, during the weekend financial leaders of G20 countries will meet in Buenos Aires to discuss various risks connected to the global economy (including trade issues). General Electric is among companies reporting earnings today.
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Open account Try demo Download mobile app Download mobile app1:30 pm BST - Canada, Retail sales and CPI inflation. Bank of Canada decided to lift interest rates by 25 basis points during its July’s meeting. The upcoming monetary decision may be dependant on Fed as policy of both Banks often moves in tandem. Interestingly, while markets expect Fed to raise interest rates two more times this year no hike is expected when it comes to BoC. However, an upbeat data stream may encourage central bankers to take more hawkish approach. According to economists surveyed by Bloomberg headline CPI inflation measure should advance from 2.2% YoY in May to 2.4% YoY in June while the core one is expected to tick higher from 1.3% YoY to 1.4% YoY. Simultaneously, retail sales reading will be released and it is expect to show an advance of 1% MoM.
Moreover, during the weekend the G20 meeting will be held in Buenos Aires, Argentina. Finance ministers and central bank presidents of the Group-of-20 will meet for the first time since the escalation of the trade conflict between China and the US in the second quarter of the year. Therefore, we can expect trade issues to be discussed as well as possible implications of a Trade War on the global economic growth. It is worth recalling that during the meeting in March financial leaders of G20 worked out a joint statement denying protectionism and called for “further dialogue”.
Central bank speakers scheduled for today:
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1:20 pm BST - Fed’s Bullard
Notable US companies reporting earnings today:
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General Electric (GE.US)
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Schlumberger (SLB.US)
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Honeywell International (HON.US)
CAD has been one of the worst performing G10 currencies against US dollar this year. An unbeat inflation reading could allow USDCAD to pull back towards the prior swing level around 1.31. Source: xStation5
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