Market This Week - Key Events

It is expected that the market is to remain volatile this week since event risk threatens US, Canadian dollar and British pound. As the positive rally at greenback last week indicates that the other regions can easily trigger reversals on the majors. It is almost certain that Federal Reserve Chairman Ben Bernanke might speak on this Friday about the Financial Stability. His speech is expected to create volatility in the US market and also create impact on Treasuries and US dollars. Market is keenly awaiting his speech in order to make corrections if any on the trading. It is also to be seen what way the fluctuations going lead the trading market in near future.

Canadian  and  UK Retail Sales

There has been sharp decline in consumer spending witnessed in Canada and due to this curtailed spending Canada has held up about 0.4 percent pace during June, leaving behind autos and retail sales which has almost jumped to 0.6 percent. Traders are finger crossed and are eagerly waiting for the outcome of Canadian Wholesale index sales on Aug 19,  this report might become trend setter for the retail headline sales report.  As it is expected to be a lagging indicator but still it is going to have some major impact on Canadian Dollar on its release which is schedule at 8.30 EDT release. The overall outlook seems to be very gloomy for the Canadian retail sales due to labor markets poor performance and lull in business activity in July. Traders are scratching their heads and are deeply thinking on where to put their money in this volatility market. Predicting correctness and stable market in the near future seems to be very bleak.

The fine sounding but insincere report of Bank of Canada seems to be hawkish and are inline with the Canadian inflation data for July month. This report should bring awareness to the trading community. As US economic and financial markets crunch progressed as anticipated the recent Monetary Policy Report for mid-July indicated that the commodity prices were surging much stronger than expected, changing the overall scenario of  domestic and global inflation.  The headline on Thursday at 7:00  EDT reported rise in CPI annualized rate of 3.3 percent which is seemingly high since March 2003 - When the 8-month high of 1.6 percent   Bank of Canada’s  core measure anticipated to go high. This information may likely to have immediate impact on Canadian dollar but the amount of risks involved are alarmingly high for the strong CPI report to trigger the rally at Loonie.

As it has been projected for Canada the retail spending by UK is also anticipated to go slow for one more month and it has been projected that for July around -0.2 percent. This might help dragging the annual rate up to 1.8 percent which is very low for the 2 years period.  This input synchronizes with British Retail Consortium’s (BRC) report surveyed for the month of July. This report clearly indicates that the consumers have apprehensions over their spending and curtailed their purse strings and this meager spending led to tumbling same-store sales to 0.9 percent from previous year. Deterioration is furthermore witnessed as the labor market conditions worsened with more jobless claims that have risen for the past six months, reminding that the consumption growth long ago peaked. Nonetheless, the 4:30 EDT report suggests that it is going to have short term repercussions on British Pound and hence traders needs to be cautious on the event risk since this data  might fluctuate either way either downside or upside.