It's a busy week for North American markets as investors prepare for another bad employment number in the U.S. Canadian markets will pay attention to the Bank of Canada's interest rate decision.
According to the Overnight Index Swaps, markets are 100% priced in for the Bank of Canada to cut interest rates by 50 basis points, which would bring rates to 0.50%.
Mike Leavitt, futures broker at MF Global, said a 50 basis point cut is probably the only option the central bank has left. He also said rate cuts, and even quantitative easing measures, will have limited impact because the global economy continues to pose a risk for the domestic economy.
"Quantitative easing will help to cushion the blow but we are being dragged down by a bigger beast," he said.
Friday's U.S. employment report will highlight further weakness in the American economy. According to some market strategists, investors will be hesitant to take long positions in equities ahead of Friday's data.
The S&P 500 is trading near session lows and, according to Mike McCarty, senior options and equities specialist at Meridian Equity Partners, next week's data is going to be critical to determining the next market trend.
"Most of the data is expected to be bad," he said. "If the employment number is worse-than-expected we will make new lows in markets. But if the data is slightly better-than-expected we could see a nice rally higher."
Guy LeBas, fixed income strategist at Janney Montgomery Scott, said bond markets are pricing in a weak employment number. He added that if the report shows a drop of less than 500,000 jobs, then fixed income markets will sell off.
All times in EST:
Monday:
08:30 CA Gross Domestic Product (M/M) December Exp: -0.6% Prior: -0.7%
08:30 CA Quarterly GDP Annualized Q4 Exp: -3.6% Prior: +1.3%
08:30 US Personal Income January Exp: -0.2% Prior: -0.2%
08:30 US Personal Spending January Exp: +0.4% Prior: -1.0%
08:30 US PCE Deflator (Y/Y) January Exp: +0.5% Prior: +0.6%
08:30 US PCE Core (M/M) January Exp: +0.1% Prior: +0.0%
08:30 US PCE Core (Y/Y) January Exp: +1.6% Prior: +1.7%
10:00 US ISM Manufacturing February Exp: +34.0 Prior: +35.6
10:00 US ISM Prices Paid February Exp: +34.0 Prior: +29
10:00 US Construction Spending (M/M) January Exp: -1.5% Prior: -1.4%
11:30 US Fed's Rosengren Speaks to Bankers in Washington
12:45 US Fed's Lacker Speaks to Economists in Arlington, Virginia
13:00 US Treasury to Sell $31B 3-Month Bills
13:00 US Treasury to Sell $29B 6-Month Bills
March 02-06 US Mortgage Delinquencies Q4 Prior: +6.99%
Tuesday:
08:00 US Fed's Lockhart Speaks on U.S. Economy, Central Bank at Tampa
09:00 CA Bank of Canada Rate Exp: 0.50% Prior: 1.00%
10:00 US Pending Home Sales (M/M) January Exp: -3.0% Prior: +6.3%
10:00 US Bernanke Testifies Before Senate Budget Committee
13:00 US Treasury to Sell 4-Week Bills
17:00 US ABC Consumer Confidence W/E March 1 Exp: -47 Prior: -48
March 3 US Total Vehicle Sales February Exp: +9.6M Prior: +9.6M
March 3 US Domestic Vehicle Sales February Exp: +6.8M Prior: +6.9M
March 02-06 US Mortgage Delinquencies Q4 Prior: +6.99%
Wednesday:
07:00 US MBA Mortgage Applications W/E Feb. 27 Prior: -15.1%
07:30 US Challenger Job Cuts (Y/Y) February Prior: +222.4%
08:15 US ADP Employment Change February Exp: -630K Prior: -522K
08:30 US Fed's Fisher Speaks at Texas Christian University 4-Mar
10:00 US ISM Non-Manufacturing Composite February Exp: +41 Prior: +42.9
10:30 US DOE U.S. Crude Oil Inventories W/E Feb. 27 Prior: +717K
10:30 US DOE U.S. Gasoline Inventories W/E Feb. 27 Prior: -3322K
10:30 US DOE U.S. Distillate Inventory W/E Feb. 27 Prior: +882K
10:30 US DOE U.S. Refinery Utilization W/E Feb. 27 Prior: -0.89%
12:00 US Fed's Lockhart Speaks on U.S. Economic Outlook in Miami
14:00 US Fed's Beige Book
14:00 US Fed Releases Beige Book Economic Report
March 02-06 US Mortgage Delinquencies Q4 Prior: +6.99%
Thursday:
08:30 CA Building Permits (M/M) January Exp: -3.5% Prior: -3.9%
08:30 US Nonfarm Productivity Q4 Exp: +1.5% Prior: +3.2%
08:30 US Unit Labor Costs Q4 Exp: +3.5% Prior: +1.8%
08:30 US Initial Jobless Claims W/E Feb. 28 Exp: +650K Prior: +667K
08:30 US Continuing Claims W/E Feb. 21 Exp: +5170K Prior: +5112K
10:00 CA Ivey Purchasing Managers Index February Exp: +36.5 Prior: +36.1
10:00 US Factory Orders January Exp: -3.5% Prior: -3.9%
10:00 US Geithner Testifies at Hearing on U.S. Treasury Budget
10:00 US Fed's Kohn Testifies on AIG Before Senate Banking Committee
10:30 US EIA Natural Gas Storage Change W/E Feb. 27 Prior: -101
12:45 US Fed's Lockhart Speaks on U.S. Economy at Kennesaw State Forum
March 5 US ICSC Chain Store Sales (Y/Y) February Prior: -1.6%
March 02-06 US Mortgage Delinquencies Q4 Prior: +6.99%
Friday:
08:30 US Change in Nonfarm Payrolls February Exp: -645K Prior: -598K
08:30 US Unemployment Rate February Exp: +7.9% Prior: +7.6%
08:30 US Change in Manufacturing Payrolls February Exp: -195K Prior: -207K
08:30 US Average Hourly Earnings (M/M) February Exp: +0.2% Prior: +0.3%
08:30 US Average Hourly Earnings (Y/Y) February Prior: +3.8%
08:30 US Average Weekly Hours February Exp: +33.3 Prior: +33.3
10:00 US Fed's Plosser Speaks on the Financial System in New York
11:15 US Fed's Dudley Speaks on Financial Market Turmoil in New York
March 02-06 US Mortgage Delinquencies Q4 Prior: +6.99%
By Neils Christensen and edited by Sarah Sussman
©CEP News Ltd. 2009