Data to set the mood for BoC meeting

This week's data releases will probably set the mood for BoC's meeting on September 9. The resilience of the Canadian consumer, together with satisfactory readings for inflation, is in line with the rhetoric of the BoC, which expects consumption and the non-energy sector to support the economy. However, weakness in manufacturing, which so far has failed to capitalize on a weaker looney, faltering global demand, and continued feebleness in oil prices, could continue to hurt the Canadian economy.

"We anticipate commodity prices to remain under pressure as uncertainty about China prevails. As such, we continue to expect the USDCAD to reach 1.40 in the months ahead and would view any dip toward 1.3200 as a buying opportunity", notes Barclays.

The release of the current account balance (Monday) and international merchandise trade (Thursday) will shed light on the strength of non-resource exports. In addition, we will get a better picture on the state of real activity with the release of Q2 GDP (consensus -0.9% y/y) and June's monthly GDP (consensus 0.3%) on Tuesday. Finally, we get unemployment data on Friday.