Canada awaiting elections, loonie to stay range bound

Canada's political campaign enters its last two weeks with polls signaling a close three-horse race among the main parties, with Conservatives holding a slight lead over Liberals and NDP. The campaign has been focused on the economy, as concerns about low commodity prices, weakness in manufacturing, global slowdown and increasing housing prices keep mounting on. 

Recent data has not been supportive, both in the domestic and external fronts (below-expected manufacturing PMI, disappointing NFP), challenging the projections of the government and the central bank. 

"This week's data will provide the market with some clues about the current state of the Canadian economy, as the elections on Oct 19 and the BoC meeting on Oct 21 loom closer. Although CAD looks bearish in the medium term, the loonie is anticipated to stay range-bound this week", says Barclays.
 
August's international merchandise trade balance is due on Tuesday, a narrowing is expected in the trade deficit to ~$300m from $593m in July. On Thursday data on new housing starts and new housing price index for August are released (previous 216.9k and 0.1% m/m respectively). 

Finally, September's labor market data are released on Friday, with consensus anticipating a unchanged print for the unemployment rate (7%) and a net change in employment of 10k (previous 12k).