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Danske Bank analysts suggest that the US trade data and BoC meeting is going to be amongst the key economic events for the day.

Key Quotes

“The Bank of Canada is widely expected to leave policy rates unchanged at today’s interim policy meeting. At the last meeting (9 January), Poloz and co signalled that the next policy move is still expected to be a hike. Meanwhile, as in the US, markets have fully priced out any hike probability over the next 12M. Given our constructive view on the global economy and our call on Fed and oil, we think this is too dovish. However, we doubt we will see any significant re-pricing post today’s announcement.”

“Today, we get the US ADP employment report, which offers some input on the job situation in the US. However, note that the correlation with non-farm payrolls on a month-to-month basis is not very high.”

“Further, US trade data is due; while normally it does not receive a lot of market attention, the chance that it might show that the US trade deficit has grown by more than USD100bn due Trump’s presidency could mean it gets some focus amid the final rounds of trade negotiations between the US and China.”

“Tonight, the Fed’s Beige Book is released and we will have speeches by the two Fed members Williams (voter, neutral) and Mester (voter, hawk).”