CAD: Focus on Governor Poloz speech and the release of CPI and retail sales – RBC CM

Elsa Lignos, Senior Currency Strategist at RBC Capital Markets, suggests that the event risk for CAD picks up this week with a speech from Governor Poloz on Tuesday and the release of CPI and retail sales data on Friday.

Key Quotes 

“The title of Poloz’s speech is “Living with lower for longer,” and although his remarks may focus on near-term policy considerations, we do not think he will provide specific details on the possible lower growth path that the BoC alluded to in the Sept. 7 rate statement.

We are forecasting headline CPI to rise by 1.4% y/y in August (prior 1.3%) as the y/y decline in gasoline prices moderates. Headline retail sales are expected at 0.1% m/m in July, reversing a 0.1% decrease in the prior month. Core sales are expected to rise 0.5% in the month. This release is the first potential evidence of any fiscal stimulus impact, as Canada Child Benefit cheques started going out in the month, although we are not expecting a meaningful add at this time.”