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The Day Ahead Canada & U.S.: Canadian Inflation and U.S. Philly Fed Survey

(CEP News) - On Thursday, markets will focus on Canada with the release of March CPI inflation data. In the United States, the Philadelphia Fed’s manufacturing survey will be the highlight of the day.Canadian annualized core CPI is expected to remain below the Bank of Canada inflation target, coming in at 1.4% for March following February’s increase of 1.5%. Month-over-month core CPI is expected to rise 0.3% following February’s increase of 0.5%.

Fergal Smith, managing market strategist from Action Economics, said Wednesday’s inflation data won’t have much of an impact on the Bank of Canada at the April 22 meeting. He said he still expects the bank to cut 50 basis points.

“I don’t think it is going to have a massive impact on next week’s policy announcement. If we get a weaker than expected core inflation number, the market would start to price in more aggressive easing beyond next week,” he said. “And if we got surprising firm inflation data, markets would start to strip out some of the easing priced in after next week.”

Turning to the U.S., markets will receive more regional manufacturing data with the release of the Philly Fed Survey. Economists expect it will come in at a level of -15 following March’s -17.4 reading.

Economists from Lehman brothers said they are expecting the index to slip further down in March to a reading of -18.0.

“Although new orders and shipments both rose last month, unfilled orders fell sharply, indicating limited potential for a significant improvement,” economists from Lehman Brothers wrote in a research note. “Additionally, the employment and the hours series both suggested that firms were reducing their headcount and trying to manage their production schedules.”

All times in EDT.

Thursday:

7:00 CA Consumer Price Index (M/M) March Exp: +0.5% Prior: +0.4%

7:00 CA Consumer Price Index (Y/Y) March Exp: +1.5% Prior: +1.8%

7:00 CA Bank Canada CPI Core (M/M) March Exp: +0.3% Prior: +0.5%

7:00 CA Bank Canada CPI Core (Y/Y) March Exp: +1.4% Prior: +1.5%

8:30 CA Report on Travel Between Canada and Other Counties

8:30 US Initial Jobless Claims 12-Apr Exp: +375K Prior: +357K

8:30 US Continuing Claims 5-Apr Exp: 2950K Prior: 2945K

9:45 US Fed’s Kohn speaks at conference on credit markets, banking

10:00 US Leading Indicators March Exp: +0.1% Prior: -0.3%

10:00 US Philadelphia Fed. APRIL Exp: -15.0 Prior: -17.4

10:30 US EIA Natural Gas Storage Change 11-Apr Exp: +16 Prior -14

10:30 US Fed’s Prescott, S&P’s Miller and Lehman Brother’s Watkinson Participate in Fed Panel

14:00 US Fed’s Fisher speaks in Chicago

15:00 US Fed’s Lacker to speak to media at credit conference in Charlotte

15:15 US New York Fed’s Calabia to moderate Credit

4:30 US MI and M2 Money Supply