USD/CAD - Growth Strong, Productivity Low

Bank of Canada Deputy Governor Sylvian Leduc spoke at the Sherbrooke Quebec Chamber of Commerce and he commented that Canadian economic growth has been strong, but the productivity level is low. Leduc also cited that economic growth in Canada over the next few quarters is expected to slow, but he noted growth should still exceed potential output. BOC Governor Stephen Poloz said last week that the Bank of Canada would be data dependent on raising interest rates and a more cautious approach is expected. The next event risk that the BOC would be "dependent" on and tee up another interest rate move is the Net Employment Change and Unemployment Rate, which is slated in for 8:30 a.m. Friday.

U.S. equity futures again are pointing to a higher open to start the day. ADP Employment Change headlined at 145,000 slightly above expectations of 135,000. A lot of data to keep an eye on this morning with Markit Composite Purchasing Managers Index and Markit Service PMI figures out at 9:45. The most significant market impact this morning will come from the U.S. Institute for Supply Management Services and Non-Manufacturing Composite for September. ISM will release at 10 a.m. with expectations at 55.5, which is slightly above the previous of 55.3. Crude Oil Inventories will release today at 10:30 while WTI Crude Oil currently trades at $50.30, down 0.18% from yesterday''s close. Another noteworthy event risk is at 3:15 p.m. when Federal Open Market Committee Chair Janet Yellen will give the welcoming remarks at a Community Banking Event.

Traders expect a range today of $1.2413 to $1.2541

September PMI data is the theme today in Europe and results were mainly poor. Italy and France performed worse than expected in both Services and Composite metrics, while Germany printed in line with expectations for Services PMI, but fell below expectations in Composite PMI. The only positive news was from the euro-zone where Services PMI performed better than expected while Composite PMI printed in line. Euro-zone Retail Sales released in the red at -0.5% m/m and 1.2% y/y. The Euro is currently trading at 1.4672.

Experts expect a range today of $1.4632 to $1.4719

Positive PMI data came out of the U.K. in September, as both Composite and Services PMI exceeded expectations and printed at 53.6 and 54.1 respectively. Prime Minister Theresa May is speaking today, and the market has priced in an 80% of a rate hike by year-end. The pound sterling is currently trading at $1.6551.

Observers expect a range today of $1.6507 to $1.6613

The Australian dollar is extending its recovery today and tested a one week high during the overnight trading session. Stronger gold prices and improving risk sentiment is helping to give the commodity currency a boost. Risk event will be tonight’s Retail Sales data and Trade Balance data at 8:30 pm EDT. Retail sales are expected to increase 0.3% while Trade Balance is expected to come in at a 0.87-billion-Australian-dollar surplus.

Oil (WTI): $50.32 U.S. per barrel

Gold: $1,275.97 U.S. per ounce

Silver: $16.61 U.S. per ounce

Copper: $2.964 U.S. per tonne

Dollar Index: 93.36

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