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US markets return after a long weekend, with Fedspeak dominating headlines. The Canadian Dollar is softer on Tuesday, reflecting some gains from the start of the trading week.
The Canadian Dollar is softer as investors await the US Gross Domestic Product (GDP) and Personal Consumption Expenditure (PCE) inflation due on Thursday and Friday, respectively. Canada reported an increase in industrial inflation in April, but little market reaction was seen.
Market sentiment took a hit last week due to the re-priced odds of a September rate cut, and traders are looking for firmer signs of rate cut plans from Fed central planners. Canadian Industrial Product Prices rose 1.5% MoM in April, reversing the forecasted decline to 0.6%.
The Canadian Current Account is expected to be overshadowed by US Q1 GDP, while market reactions to Canadian Q1 GDP on Friday will be dominated by US PCE Price Index inflation. Markets are expecting a downturn in US GDP, while US PCE inflation is forecast to hold in-line with previous figures.
