Trade Desk Thoughts - CAD Building Permits

CAD Building Permits (August) Actual -13.5%, Expected -1.4%, Previous 2.6% (Revised from 1.8%)

Release Explanation: The number of residential and non-residential Building Permits issued in a month. The yearly change is also given. Act as a leading indicator on the Construction Market sentiment because obtaining a permit is among the first steps in constructing a new building. 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 Desk Thoughts: Declines in the residential and non-residential sectors led to a CAD$5.6 billion (-13.5%) decline in Building Permits during August, a level not seen since last March. For the year, permits decreased by 0.7%. In the residential sector, the value of building permits declined by 9.3% to CAD$3.4 billion. This decline was mainly due to a 17.5% drop in multi-family dwellings, coupled with a 3.8% decline in single-family dwellings. The value of non-residential permits declined CAD$2.2 billion (-19.3%) for the second time in three months. All three components that make up the non-residential sector-industrial, commercial and institutional-saw declines.

Forex Technical Reaction: The cad (USD/CAD) rose during overnight trading as crude oil futures declined nearly 2.5%, reaching its highest level since May of 2007. The weak report on new permits accelerated the loonies' decline by over 50 pips.

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