USD/CAD trimmed yesterday's gains to trade at 1.3843, the pair's lowest since February 5th, during early European session, still down 0.12%. But the Canadian dollar weakened after a meeting between oil ministers from Saudi Arabia, Russia, Qatar and Venezuela ended with consensus to freeze output, but not to cut production, all eyes on today's Iran's meeting in Tehran.

While, BoC's deputy governor tinted that Canada has a two-speed economy, where the non-resource economy, consumption and exports outperform the energy sector and investment, rendering further easing unnecessary as risks to inflation are roughly balanced. Investment is likely to remain subdued, as oil prices continue declining and volatility in financial markets heightens.

The persistent slack in the economy, coupled with a slowdown in global demand generate deflationary pressures and downside risks to the economic outlook.

We believe more stimulus might be necessary for BoC to keep inflation on track, but BoC will likely wait until the second half of the year, in part until there is more clarity on the fiscal stimulus plan.

This week's data will provide information about the resilience of the non-resource sector and the Canadian consumer.

December manufacturing sales are released on Tuesday (consensus 0.8% m/m), wholesale trade sales on Thursday (consensus -0.3% m/m) and retail sales on Friday (consensus -0.8% m/m).

Price data for January are released on Friday, and the consensus expects headline CPI inflation to reach 1.7% y/y (vs. 1.6% previous) and core to stay at 1.9% y/y.