CAD Building Permits (Feb) Actual -15.9%, Expected -3.6%, Previous -4.6%

Release Explanation: Building permits cover the amount of residential and non-residential Building Permits issued in a month. Act as a leading indicator on the Construction Market sentiment because obtaining a permit is among the first steps in constructing a new building. According to Trade Team Members, “The report will affect future sales of new construction and then eventually Retail Sales, GDP and Durable Goods as new additions are fitted out with fixtures and fittings”. “A currency will eventually be affected by these numbers as they are the first phase in the home construction process”. Trade Team Members said.

Trade Desk Thoughts: Statistics Canada said the value of building permits fell 15.9% t0 $3.7 billion in February. The largest decreases came from the non-residential sector in Ontario. In residential sector, the value of permits edged down to 0.3% to $2.1 billion. The increase in the value of permits for multiple dwellings in British Columbia nearly offset the declines in the residential sector in six provinces. In the non-residential sector, the value of permits fell 30.5% to $1.6 billion. This decline was due to a drop in Ontario and decreases in four other provinces. An extremely disappointing number for building permits. “This is an indication that the housing sector will remain a strain on the overall Canadian economy. Added pressure will now mount on the construction industry and other sectors of the economy” the Team said.

Forex Technical Reaction: After trading stronger since the start of the new trading week, the Canadian dollar weakened ahead of the release, in line with U.S. futures moving lower, and 1.2350 has formed as a swing point. “Continued weakness in the U.S. futures coupled with this negative release, falling oil prices, and a possible disappointment in the Ivey PMI read at 10:00 EDT may push the pair higher to test the high of Friday at 1.2455”, the team said.