Talking Points:

10/24 Wednesday | 14:00 GMT | CAD Bank of Canada Rate Decision

The Canadian Dollar heads into the week of the October Bank of Canada rate decision near six-week lows after the release of the September Consumer Price Index and Retail Sales reports. Canadian inflation figures came in much weaker than anticipated for last month, registering +2.2% versus +2.7% expected (y/y) on the headline. Moreover, the September consumption print came in far below expectations as well, contracting in fact. Curiously, October Bank of Canada meeting rate hike odds are up from 78% to 92% today after the data, which leads to the conclusion that the hike is very much priced-in.

In turn, USD/CAD may have some fuel left in the tank to run higher as it’s now difficult to foresee the BOC increasing its hawkish rhetoric after the September CPI and retail sales reports. The absence of forward guidance could undercut the Canadian Dollar; USD/CAD may soon be challenging the descending trendline from the highs in June and September near 1.3125.

Pairs to Watch: CAD/JPY, EUR/CAD, USD/CAD

10/25 Thursday | 11:45 GMT | EUR European Central Bank Rate Decision

Despite the fact that the October European Central Bank policy meeting won’t produce new Staff Economic Projections, and therefore, expectations for any change in policy are extremely low (like the Federal Reserve (with its Summary of Economic Projections) or the Bank of England (with its Quarterly Inflation Report), the ECB has a multi-year track record of only making significant policy shifts at meetings when it has new economic forecasts in hand).