Daily digest market movers: Canadian Dollar coils ahead of mid-week rate call
- CAD markets are poised for a broadly-anticipated BoC rate cut. Investors are broadly expecting a 25 bps trim as a follow-up to June’s initial quarter-point cut.
- Too many cuts too fast could easily tip the Canadian economy into an inflation-hot recession with key price growth indicators already flashing warning signs after June’s cut.
- Canada’s housing market already represents an outsized proportion of the Canadian economy, nearly twice the OECD average. Declining rates could spark a fresh flurry in the real estate market, further burdening Canada with long-dated consumer debt and reigniting a run in housing prices.
- The US is poised to kick off a three-day data dump beginning on Wednesday with Purchasing Managers Index (PMI) figures, followed by Thursday’s Gross Domestic Product (GDP) update and Friday’s Personal Consumption Expenditure Price Index (PCE) inflation.
- After last week’s broad-market risk rally and a September rate hike fully priced in, investors will be looking for a continued easing in US data prints to help keep rate cut hopes buoyed
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