In Focus: GDP Releases in Europe and Canada and GfK Consumer Confidence Index

On Tuesday, market participants have the GDP releases in Europe and Canada and the GfK Consumer Confidence Index, with an impact on EURUSD, USDCAD, GBPUSD, crude oil and crude energy products.

Inflation in the Euro area surprised economists with its downturn. EMU’s GDP is estimated to increase 2.5% YoY compared to a previous growth of 2.3% and beating the estimated 2.4% growth initially forecast.

EURUSD stays offered following CPI data release, revolving around 1.16382 and higher as key releases move the European market.

Still on a positive side, unemployment rate in the Euro area decreased 8.9% in September, exceeding initial estimates.

However, the inflation rate directly impacting the CPI shows a 1.4% annualised increase in headline consumer prices in October. Economists expect an annualised economic growth of 2.5% during the period July – September and 0.6% inter-quarter, both of which surpass previous surveys.

Canadian GDP – All Eyes on CAD

Travelling across the Atlantic, in Canada, things are not so rosy with a disappointing GDP release that missed the September consensus. Tracking the lower than expected figure, USDCAD trades around 1.28967 and heading towards the 1.2900 handle.

The pair remains bid amid upside pressure from the GDP figure. In September the country contracted only 0.1% compared to the envisaged 0.1% expansion.

Raw Material Price Index (RMPI) ditched to 0.1% in September, following a  previous 0.9% increase in August. Crude energy products, among the key six Canadian commodity groups, put pressure on the RMPI, as rates went up 3.9% after a 3.0% increase in August. Conventional crude oil jumped, adding 4.0%, while crude energy products dropped 2.8% in September.

Crop products followed a downward trend going down 1.6%, thus contributing to a lower RMPI figure, particularly due to lower than expected wheat prices, below 5.8%, canola (including rapeseed), below 3.5% and other crop product prices, lower by 0.5%.

Livestock prices also dropped by 11.7%, especially hogs sinking below 23.3%, and cattle and calves down by 6.2% also contributed to a lower than expected RMPI.

 

GfK Consumer Confidence – GBP in Focus

GfK consumer confidence index released on Tuesday seems to have eased, hitting -10 in October vs the -9 the previous month and matching consensus.

While the figure continues to remain in the 3-year lows zone, Reuters economists expect little to no change over the past 5 months and the latest release will probably have a minor impact on the BOE’s analysis and less likely to influence policymakers’ decision about interest rates.

Tracking this, GBPUSD trades around 1.32472, while EURGBP dips to 0.87843.