Ahead of the Canadian CPI release at the.....>

CANADA: Ahead of the Canadian CPI release at the bottom of the hour, RBC is

forecasting an above consensus print of 2.6%y/y for July CPI (cons. 2.5%, prev.

2.5%) but with energy price growth serving as the main driver, it should cap the

CAD-impact. 

- CACIB note expectations target stabilizing price growth. If so, mkts should

continue to price in a close to 80% probability of the BoC to hike in Oct. But,

falling political uncertainty will be needed for the CAD to regain more ground.

However, we do see scope for a more positive news flow on - Nafta in the weeks

to come and such prospects leave us short USD/CAD as a trade recommendation.

- Citi note, today's print is important and will have undoubted implications for

the BoC either way; with a significant miss potentially resulting in a pricing

out of the curve. However, USDCAD spot remains unruly and we still think views

here are better expressed in rates. Canada remains out in the cold on Nafta

talks with no resolution in sight in the near term and that is definitely

weighing heavy on the currency. 1.3050 is still the level of note to the

downside and 1.3180 marks the top of the range higher."