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Loonie Surges After Upbeat CPI Data; Oil Prices Retreat
Published February 23, 2018
The Canadian dollar reversed a small portion of the last 3 week’s losses after monthly inflation data exceeded expectations, coming in at 0.7% versus an expected 0.4%. A miss on CPI would have almost certainly lowered the expectations of 2 more rate hikes by the BoC in 2018; any potential concerns were assuaged after this morning’s print.
The president of the St. Louis Federal Reserve, James Bullard, spoke yesterday urging policymakers to exercise caution in increasing rates, to avoid slowing down the economy. Market expectations are for a total of 3 rate hikes by the US Federal Reserve in 2018.
The euro dipped in today’s session and is set to post a weekly loss of over 1.5% as investors hedged portfolios before some big European political events. On March 4, the outcome of the Italian general election is due, as well as the result of the poll by the German Social Democrats to determine member sentiment relating to joining another coalition government with Merkel’s conservatives.
Oil prices were down to start this morning’s session over concerns that continually rising US production would offset and outpace OPEC’s attempts to curb global production. Prices are now slightly higher than the opening with yesterday’s US Energy Information Administration report of crude inventories declining by 1.6 million barrels winning over market sentiment. WTI crude is up 0.01% to $62.74 with Brent crude up 0.01% to $66.41 at the time of writing.