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Canadian Headline Inflation Set to Contract | Fed Decision Day

Published December 19, 2018
  • The loonie suffered major routs against the greenback in yesterday’s session as the pair hit a new yearly high of 1.3496. This was spurred on by persistent declines in oil which is expected to have a knock on effect on Canadian CPI data today. Forecasts predict a contraction of 0.4% from last month’s 0.3% advance.
  • China and the US held vice-ministerial level talks yesterday to further confer on the ongoing trade dispute. Plans to hold formal meetings in January to negotiate a broader truce to the trade war are still hopeful, however, much progress is still required to secure substantive negotiations.
  • Market expectations are priced in for a dovish hike from the Federal Reserve at 2 pm EST today. The substance will come in the forecasts published with the rate decision, likely to signal a slower approach to policy tightening in 2019.
  • The US Senate is preparing substantial actions to delay a major confrontation between Congress and President Trump over funding for the border wall. The expectations are that such actions would finance the US government until February, effectively extending more time for a breakthrough in negotiations.