Summary:
- Second day of Powell hearings
- Market consensus expects significant slowdown of the Canadian inflation
- API signalled huge drop in oil inventories
Some interesting readings are scheduled for Monday and each of them has a potential to move markets. The European Commission will release a batch of confidence indices for different sectors of the European economy in the morning (10:00 am GMT). However, these prints are often overlooked by investors and seldom have any impact on prices. In terms of EUR trading, more attention should be paid to ECB speakers. Inflation report from Canada will see daylight in the early afternoon followed by US data sometime later. Data on oil inventories rounds up the calendar.
1:30 pm GMT - Canada, CPI inflation for January. The Canadian economy ended the previous year on the somewhat weaker footing as both retail and manufacturing sales disappointed in December. However, solid labour market report for January boosted sentiment towards CAD and the currency outperformed US peer throughout February. Today’s inflation print may further support the Canadian dollar as expectations are pretty low at 1.5% YoY (previously 2% YoY).
3:00 pm GMT - Data from the United States and Powell testimony to the House Financial Services Committee. Powell did not surprise markets yesterday during hearings in the Senate Banking Committee and in turn no major price swings were spotted. Fed Chair will have another chance today when he appears in front of the House Financial Services Committee. However, investors should not expect “Jay” to deliver a message significantly differing from the yesterday’s. Apart from that, pending home sales data for January will be released at 3:00 pm GMT and it is expected to show a 0.4% MoM advance.
3:30 pm GMT - DOE report on oil inventories. Oil price managed to recover a bit from Trump’s tweet released on Monday. Yesterday’s release of API estimates could have played part in it as the reading signalled a major drop of 4.2 mb. In cases this is confirmed by the data from the US Department of Energy today, bulls could consider revisiting YTD highs.
Central bank speakers scheduled for today:
- 8:30 am GMT - ECB’s Coeure
- 10:00 am GMT - ECB’s Weidmann
Brent (OIL) pulled back from the resistance zone ranging around the $67 handle. Bulls manage to regain ground yesterday but a solid inventory print could result in a retest of the aforementioned zone. Source: xStation5
