3 Numbers to Watch: US Trade Balance, Optimism Index; CAN Housing

Yesterday’s stronger-than-expected Sentix data for the Eurozone was a signal that the European Central Bank’s new bond-buying plan had successfully boosted investor morale. The survey, conducted September 6-8, resulted in a confidence index of -23.2, much higher than the -30.5 originally forecast by analysts.

With investors waiting anxiously for the week’s double bill of risk events – the German Constitutional Court’s decision on Wednesday, followed by the FOMC meeting on Thursday – I expect today to be a relatively slow day. Still there are some numbers to watch out for. We have trade data for July and the NFIB small business optimism index for August due out in the US, while Canada is set to release data on housing starts. 

US Trade Balance (12:30 GMT) The US trade deficit is expected to expand for July on the back of rising prices for crude oil. The trade gap is forecast to grow to USD 44.8 billion for the month from USD 42.9 billion in June. The services sector, which recorded a surplus of USD 14.6 billion in June, only partly offset the USD 22.5 billion deficit in imported petroleum. The recent dip in oil prices, which saw crude fall to around USD 90 a barrel, caused the US trade deficit to narrow last month. However, oil prices have moved sharply higher since June with crude trading at USD 114 on Monday afternoon in Europe.

Canada Housing Starts (12:15 GMT) Housing growth in Canada is expected to moderate for August after a fall in the number of building permits granted. The number of housing starts is forecast to decline from 208,500 in July to 201,000 in August, according to a consensus of analysts. Recent data shows municipalities in Canada issued building permits worth just over C$6.8 billion in July, down 2.3% from June, as a result of lower construction intentions for both residential and non-residential buildings.

NFIB Small Business Optimism Index (11:30 GMT) As is often quoted in the press, small businesses account for almost half of GDP in the US and a significant share of the country’s work force. The National Federation of Independent Business’s Optimism Index gauges confidence levels for small businesses in the US. The index, which has averaged 90 points during the recovery period, is forecast to inch higher from 91.2 in July to 91.3 in August, after slipping 0.2 points last month. It reported weak components in earnings trends and sales expectations, but also identified strength in employment and general expectations for the economy.

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