Canadian manufacturing likely to have fallen in October

Canadian manufacturing data for the month of October is set to release tomorrow. According to a TD Economics research report, manufacturing sales are expected to have dropped 0.8 percent in the month as a sharp fall in petroleum production outweighs higher durable goods sales.

The energy sector lost around 300k bpd of refining capacity in early October, around 20 percent of the Canadian total, due to shutdowns at the Irving facility in Saint John that will give a considerable headwind to manufacturing activity as a whole.

Motor vehicles are likely to have provided a major offset on higher reported production figures, while a rebound in machinery manufacturing might add another source of strength after registering the largest fall since 2012 in the month before CUSMA agreement.

“Real manufacturing sales should see a slightly larger decline on higher factory prices and should energy provide the primary source of downside we would be inclined to fade any reaction given a likely rebound next month”, added TD Economics.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at -17.0846, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -51.7492. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex