Archived IMT (2009.05.20)

The expected 0.6% in Canada CPI (due at 11:00 GMT, 12:00 London) from 1.2% is the headline CPI y/y, which would be a substantial drop for a y/y basis (lowest since Nov 2001). Core CPI is expected to slow to 1.8% y/y from 2.0%. If we do get anyting lower than 0.8% in the annual headline, expect renewed losses for CAD, hence USDCAD could jump towards 1.1645-50s. Rising oil prices may come in the way of falling CAD.