All Eyes on Tax Reform in the US; Oil Prices Move Higher
Published December 18, 2017
Stephen Poloz took the loonie for a ride last week. He cited that continued monetary stimulus would be less needed over time as economic conditions are becoming more favourable. With this being positive news for the loonie, traders wasted no time taking long positions, bidding the up the dollar almost a full cent. All gains made in the loonie were given back later in the day when Poloz went on record to say that there were several economic concerns that would need to be closely monitored.
Oil prices rose this morning amid an ongoing North Sea pipeline outage and because a strike by Nigerian oil workers has threatened its crude exports. Signs that booming US crude output growth may be slowing also supported crude prices, although the outlook for 2018 still points to ample supply despite production cuts led by OPEC. Brent Crude and WTI are both up ~0.55% on the day with Brent Crude trading at 63.50 and WTI Crude trading at 57.61, at time of writing.
A major event for USDCAD this week will be the tax reform bill vote in Washington. The outcome of the Senate vote is much too close to call at this point, so any outcome is not yet priced into the market. Top US Republicans said yesterday that they expect Congress to pass the tax code overhaul this week, with a Senate vote as early as tomorrow. President Donald Trump is aiming to sign the bill by the end of the week.
Key economic data for Canada this week includes Retail Sales and CPI on Thursday on October GDP data on Friday.
In the US, Housing Starts and Building Permits come out tomorrow, with Existing Home Sales Wednesday and New Home Sales on Friday. Durable Goods Orders and Personal Spending and Income also come out on Friday.