Henry Liu
Former FPA Special Consultant
- Messages
- 473
CPI is also known as Inflation and our focus will be on the Core Inflation figure, also known as CPI excluding Food and Energy, or CPI ex Volatile Items…
Here’s the forecast:
7:00am CA Core CPI m/m Forecast 0.1% Previous 0.7%
ACTION: USD/CAD BUY -0.2% / SELL 0.4%
The Trade Plan
The Core CPI report will be released today and our deviation for this release, based on a historical track record, is at 0.3%. Therefore, look for tradable figures of -0.2% or worse to BUY USD/CAD or a 0.4% or better to SELL USD/CAD.
Keep in mind to look for an after-news retracement trade for this release. I’ll wait for the release, then the initial market move, and wait for a decent retracement before jumping in. For more information on my trading methods:
Henry Liu's Trading Method
The Market
Canada’s headline inflation rate is forecasted to be set at 3.4%. This is the fastest pace of price growth in nearly two years. Economists expect that the high inflation level should spark a bullish reaction in the Canadian Dollar.
BOC is facing pressures to raise interest rate in the future, near quarter Q3. Borrowing costs are expected to rise by 75 basis points over the next year and BOC may elevate interest rates from 1.0 % in order to level inflation expectations.
High commodity prices are pressuring business firms to hold back on spending and raise consumer costs in order to boost profits.
Additional Thoughts
USDCAD may stall until the equity market opens; therefore I’d recommend using some patience when trading this pair during 7:00am hour. Also Core CPI rarely surprises much, so if we do not get our deviation, just stay out of the market until U.S. market opens.
Pre-news Consideration
There is no pre-news trading for this event.
DEFINITION:
“CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households (Wikipedia).” It is also known as the “True Cost of Living”.
Our focus is on the Core CPI or CPI ex Energy and Food components, which provides a better picture of inflation without the seasonal factor.
Historical Chart and Data for CAD Core CPI m/m
Thanks,
Here’s the forecast:
7:00am CA Core CPI m/m Forecast 0.1% Previous 0.7%
ACTION: USD/CAD BUY -0.2% / SELL 0.4%
The Trade Plan
The Core CPI report will be released today and our deviation for this release, based on a historical track record, is at 0.3%. Therefore, look for tradable figures of -0.2% or worse to BUY USD/CAD or a 0.4% or better to SELL USD/CAD.
Keep in mind to look for an after-news retracement trade for this release. I’ll wait for the release, then the initial market move, and wait for a decent retracement before jumping in. For more information on my trading methods:
Henry Liu's Trading Method
The Market
Canada’s headline inflation rate is forecasted to be set at 3.4%. This is the fastest pace of price growth in nearly two years. Economists expect that the high inflation level should spark a bullish reaction in the Canadian Dollar.
BOC is facing pressures to raise interest rate in the future, near quarter Q3. Borrowing costs are expected to rise by 75 basis points over the next year and BOC may elevate interest rates from 1.0 % in order to level inflation expectations.
High commodity prices are pressuring business firms to hold back on spending and raise consumer costs in order to boost profits.
Additional Thoughts
USDCAD may stall until the equity market opens; therefore I’d recommend using some patience when trading this pair during 7:00am hour. Also Core CPI rarely surprises much, so if we do not get our deviation, just stay out of the market until U.S. market opens.
Pre-news Consideration
There is no pre-news trading for this event.
DEFINITION:
“CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households (Wikipedia).” It is also known as the “True Cost of Living”.
Our focus is on the Core CPI or CPI ex Energy and Food components, which provides a better picture of inflation without the seasonal factor.
Historical Chart and Data for CAD Core CPI m/m
Thanks,
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