LOOK AHEAD: Thursday Data Calendar: Weekly Claims, Retail Sales, Import/Export

• BoC Governor Macklem speaks on “Economic factors shaping Canada’s monetary policy” today with text released at 1520ET before the event itself starts 1535ET.
• There will be an audience Q&A after his remarks but no media availability, although it’s being clouded by whether there will be a Fall Economic Statement or not after 1600ET.
• There aren’t likely to be any new steers from a near-term monetary policy angle as we haven’t had any notable releases since the BoC’s hawkish 50bp cut last week. See the MNI BoC Review here for a rundown of that meeting.
• The greater focus will likely be on any comments around the inflation targeting framework that is due to be reviewed next year. The below is from last week’s BoC press conference.
• For now, BoC-dated OIS continues to price 18-19bp of cuts for the Jan 29 decision whilst Can-US 2Y yield differentials are off earlier highs of -120bps but still +2.5bp on the day at -120bps. 

Q about appropriate inflation target. Rogers mentioned in fireside chat that it’s a good time to review the target. 

• Rogers: Referring to the Bank regularly reviewing its inflation targeting framework every five years, which is coming up. We take a broad outreach to Canadians, and that process is just getting going so I don’t have any details to go into right now. I expect perhaps unlike previous reviews that there will be more participation this time.
• Macklem: I did say if you change your target because it’s tough to get back to it, then you don’t have a target. We do periodically review this framework and that is the appropriate time to ask if it’s the best available for the future. I’ll have more on this to say in terms of what are the questions we want to be asking at my speech on Monday. 

• Banque de France has revised its GDP growth forecasts lower for both 2025 (to 0.9% vs a prior forecast of 1.2%) and for 2026 (to 1.3% vs a prior 1.5%).
• It now also then expects to see 1.3% growth in 2027.
• “Domestic demand will be affected not only by fiscal consolidation measures, but also by the context of uncertainty surrounding them”.
• “Household spending will only accelerate moderately after being lackluster in 2024 and the contribution from investment will remain negative.” 

• RES 4: 1.0937 High Nov 5 / 6 and a key resistance  
• RES 3: 1.0825 High Nov 7 
• RES 2: 1.0673 50-day EMA
• RES 1: 1.0552/0630 20-day EMA / High Dec 06
• PRICE: 1.0499 @ 16:37 GMT Dec 16
• SUP 1: 1.0425/0335 Low Nov 26 / 22 and the bear trigger   
• SUP 2: 1.0311 1.382 proj of the Sep 25 - Oct 23 - Nov 5 price swing
• SUP 3: 1.0258 1.500 proj of the Sep 25 - Oct 23 - Nov 5 price swing  
• SUP 4: 1.0201 61.8% retracement of the Sep 28 - Juk 18 bull leg     

EURUSD maintains a softer tone and gains are considered corrective. Resistance at 1.0552, the 20-day EMA, is intact. A close above this average would signal scope for a stronger corrective recovery towards 1.0673, the 50-day EMA. An extension higher would allow for a continued unwinding of the recent oversold condition. Support at 1.0461, the Dec 2 low, has been pierced. A clear break would expose 1.0335, the Nov 22 low and bear trigger.