Canada Inflation Talking Points:
- The May Canada inflation report (consumer price index) is due on Wednesday, June 19 at 12:30 GMT.
- The pullback in oil prices in recent weeks appears ready to put a cap on the rebound in Canada inflation.
- Retail traders[1]are net-long USDJPY[2] and net-short USDCAD[3], suggesting that the Japanese Yen[4] will rally and the Canadian Dollar[5] will fall in the coming days.
Join me on Mondays at 7:30 EDT/11:30 GMT[6] for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below.
06/19 WEDNESDAY | 12:30 GMT | CAD Consumer Price Index (MAY)
The pullback in oil prices in recent weeks appears ready to put a cap on the rebound in Canada inflation – no different than what’s being experienced across the rest of the developed economic world. Crude oil prices[7] plunged by -15.9% in May, weighing significantly on the yearly performance: at their peak, crude oil prices were up by 46.7% in 2019; at the time of writing, they were only up by 16.2% in 2019.
Accordingly, a Bloomberg News survey shows consensus forecasts pointing to headline May Canada inflation duein at 2%(y/y), unchanged from April’s pace of price pressures.The monthly reading is due in at 0.1% from 0.4% (m/m), clearer evidence disinflation is starting to appear.
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