It’s a big week for Canada with CPI and a Bank of Canada rate decision on deck. Here’s what’s coming up:

• Monday, Sept 15
  
  • 8:30 am ET: July manufacturing shipments (consensus +1.8% m/m after +0.3% previously)
  
  • 8:30 am ET: Wholesale sales ex-petroleum (Jul, +1.3% expected)
  
  • 9:00 am ET: Existing home sales (Aug, prior +3.8%)

• Tuesday, Sept 16
  
  • 8:15 am ET: August housing starts (consensus 273.2K vs 294.1K prior)
  
  • 8:30 am ET: CPI (Aug, headline seen at +0.1% m/m, +2.0% y/y)
  
  • 8:30 am ET: Core measures (median +3.1% y/y, trim +3.0% y/y)

• Wednesday, Sept 17
  
  • 8:30 am ET: International securities transactions (Jul, prior +$0.7B)
  
  • 9:45 am ET: Bank of Canada rate decision (expected cut to 2.50%, down from 2.75% prior)

• Friday, Sept 19
  
  • 8:30 am ET: July retail sales (expected -0.9% vs +1.5% prior)
  
  • 8:30 am ET: Retail sales ex-autos (-0.7% prior +1.9%)

The focus will be squarely on Tuesday’s CPI report and Wednesday’s Bank of Canada. Inflation is expected to cool modestly on the headline but remain sticky on the core, still it’s certainly at a level where the central bank is comfortable cutting rates to neutral, and the question is whether they want to get below neutral.

The market is 90% priced for a cut with a 38% chance of a further cut in October.

Retail sales at the end of the week will add another layer to the consumer picture. So far, the Canadian consumer has been surprisingly resilient but with layoffs picking up, we could see the belt buckles tightened.