The key gauge for inflation in Canada. Simply put, inflation reflects a decline in the purchasing power of the Canadian Dollar, meaning each Dollar buys fewer goods and services. CPI is the most obvious way to measure changes in purchasing power - the report tracks changes in the price of a basket of goods and services that a typical Canadian household might purchase. An increase in the index indicates that it takes more Dollars to purchase this same set of basic consumer items.

As the most important indicator of inflation in Canada , Consumer Price figures are closely followed by Canada 's central bank. The Bank of Canada has a target inflation band of 1 - 3 % and uses CPI and Core CPI as its principle gauge (the Bank of Canada posts inflation targets and CPI on their homepage). A rising CPI may prompt the central bank to raise interest rates in order to manage inflation and slow economic growth. Higher interest rates make holding the Dollar more attractive to foreign investors, and this higher level of demand will place upward pressure on the value of the Dollar.

CPI Excluding Core Eight

The Consumer Price Index excluding eight items which the Bank of Canada has deemed to have the most volatility from month to month. The goods omitted tend to fluctuate idiosyncratically and may distort CPI data. The headline figure for CPI is the percentage change in the index on a month to month and year to year basis.

Note : These Eight items include: fruit, vegetables, gasoline, fuel oil, natural gas, mortgage interest, inter-city transportation and tobacco products. Changes in the CPI Excluding the Core 8 are recognized as a better indicator of inflation than the regular CPI. The headline figure is reported as a percent change on both the month to month and year to year basis.

Movements in these indicators are known to precede larger developments in the rest of the economy.

The Index includes account inventory ratios, machinery orders, stock prices and other leading economic indicators. As the aggregate of many leading indices the Leading Economic Index provides a forecast of the future state of the domestic economy and is thought to predict activity that will occur 6-9 months after the reporting period.

The index operates on a 1-100 scale, where a value lower than 50 means that most indictors are negative and a value higher than 50 means most indicators are positive. In both cases a greater distance from the midpoint (50) means that the indicators are more strongly positive or negative.

BoC Interest Rate Decision is announced by the Bank of Canada. If the BoC is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the CAD. Likewise, if the BoC has a dovish view on the Canadian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.

This statement is the primary medium used by the Bank of Canada (BoC) to communicate with investors about monetary policy decisions, specifically those regarding interest rates.

A quarterly report of the Bank of Canada’s Governing Council, presenting the Bank’s base-case projection for inflation and growth in the Canadian economy, and its assessment of risks.

The actual inventories of crude oil, gasoline, and distillate, such as jet fuel, as reported on a weekly basis. The numbers are watched closely by the energy markets, and if the results differ greatly from the expected inventory levels, the market can react strongly. The inventory data can be skewed by holidays and seasonal factors. Weekly data can be unreliable and should be viewed as a part of longer-term trends, so a four-week moving average may be more useful.

(BOC) Press Conference Following the Release of the Monetary Policy Report The global economic recovery is entering a new phase.

A survey of the current state of the business sector in Australia . Based on a survey of hundreds of small and large sized companies, the National Australia Bank delivers monthly comprehensive quarterly reports.

This comprehensive survey primarily provides insight into the state of the Australian economy and puts forth leading indicators that signal its future direction. Thus the survey's findings, if unexpected, have the power to move markets directly.

The National Australia Bank releases both a monthly and quarterly report. The quarterly report is more comprehensive, surveying around 1000 small to large non-farm firms. The quarterly report provides greater detail on the data as well as a short to mid-term outlook of Australia . Because of seasonal volatility and government protections the survey only excludes the farm sector.

A country's trade balance reflects the difference between exports and imports of goods and services. The trade balance is one of the biggest components of the Balance of Payment, giving valuable insight into pressures on country's currency.

Surpluses and Deficits
A positive Trade Balance (surplus) indicates that exports are greater than imports. When imports exceed exports, the country experiences a trade deficit. Because foreign goods are usually purchased using foreign currency, trade deficits usually reflect currency leaking out of the country. Such currency outflows may lead to a natural depreciation unless countered by comparable capital inflows (inflows in the form of investments, FDI - where foreigners investing in local equity, bond or real estates markets). At a bare minimum, deficits fundamentally weigh down the value of the currency.

Ramifications of Trade Balance on Markets
There are a number of factors that work to diminish the market impact of Trade Balance upon immediate release. The report is not very timely, coming some time after the reporting period. Developments in many of the figure's components are also typically anticipated well beforehand. Lastly, since the report reflects data for a specific reporting month or quarter, any significant changes in the Trade Balance should plausibly have already been felt during that period - and not during the release of data.

However, because of the overall significance of Trade Balance data in forecasting trends in the Forex Market, the release has historically been one of the most important reports out of the any country.

This review reflects businessmen sentiment concerning the position of the industrial sector of the economy.

The European Central Bank's decision to increase, decrease, or maintain interest rates. Controlling interest rates is the key mechanism of monetary policy, and the ECB influences interest rates by first changing the "overnight rate" through the purchase or sale of government bonds. Lowering rates can spur economic growth but may incite inflationary pressures. On the other hand, increasing rates slow inflation but can stymie growth.

The European Central Bank makes a concerted effort to be transparent in its policy. Frequent speeches by Bank Governors make policy goals clear and the Bank adheres to a stated inflation target of 2% changing rates accordingly to meet that goal. Because of this, rate decisions are generally well anticipated, but very important nonetheless.

The ECB's rate decision has an enormous influence on financial markets. Because the ECB interest rate is essentially the return investors receive while holding Euros, changes in rates affect the exchange rate of the Euro.

Because rate changes are usually well anticipated, the actual decision does not tend to impact the market. But if the ECB changes rates they will hold a press conference where some rationale for the decision is offered. Market participants pay close attention to the press conference, hoping to clue in on the likelihood of further rate changes. Often, the language used in the press conference holds important signals to how ECB feels about inflation and the economy. The ECB President's language will be "hawkish" if he is pessimistic about the inflation outlook for the economy. In that case, the market sees a higher chance of future rate hike. Conversely, if the ECB President believes inflation is in check, his remarks will be "dovish," and the market perceives a future rate increase to be unlikely.

Financial institutions can place surplus funds in the European Central Bank-administered Marginal Lending Facility to be loaned to institutions requiring overnight loans to meet temporary cash shortages. The Deposit Rate is the interest paid to depositors when they place funds with their respective national Central Bank within the Eurosystem.

A mechanism that central banks use when lending funds to primary dealers. Lending facilities provide financial institutions with access to funds in order to satisfy reserve requirements using the overnight lending market. Lending facilities are also used to increase liquidity over longer periods such as by using term auction facilities.