Canada industrial product prices for August -0.8% versus -0.3% expected

Prior IPPI MoM 0.0%

• Prior raw material price (RMPI) MoM 0.7%
• IPPI YoY 0.2% vs 2.9% last month revised to 2.8%
• RMPI MoM -3.1% vs -2.0% estimate
• RMPI YoY -2.5% vs 4.1% last month

Much lower than expectations.

For the IPPI

• Lower prices for energy and petroleum products were mainly responsible for the decline. Excluding energy and petroleum products, the IPPI decreased -0.2%.
• The IPPI rose 0.2% year-over-year in August, marking the fifth consecutive increase. The main drivers of this growth were unwrought precious metals (+24.0%) and aluminum (+33.2%), which were boosted by economic uncertainty. Petrochemicals also saw a significant price increase (+12.2%). However, prices fell for diesel fuel (-17.1%), motor gasoline (-11.8%), and grain and oilseed products (-26.9%) over the same period.

For the RMPI:

• The RMPI declined -3.1% month over month in August, led by lower prices for crude energy products (-5.0%). Excluding crude energy products, the RMPI fell -1.8%
• The main driver of the year-over-year decline in August was lower crude energy prices, with conventional crude oil down 5.9% and synthetic crude oil down 8.5%. Other notable price drops included canola (-26.5%) and nickel ores and concentrates (-19.1%), largely due to elevated supply in these markets over the past 12 months

Despite the softer numbers in this appraiser data, the retail sales works from an unexpected 0.9% versus 0.6%.

The USDCAD has moved lower about 12 pips and tests its 100 hour moving average on the 4-hour chart at 1.35497. Yesterday, the price tested the 100-bar moving average and bounced later in the day (after failing on a break earlier in the day). The low price from Wednesday’s trade also bounced off of the 100 bar moving average of the 4-hour chart.

This article was written by Greg Michalowski at www.forexlive.com.