Release Explanation: The Raw material Price Index (RMPI) measures the change in the price of raw materials purchased by manufacturers. It's a leading indicator of consumer inflation;when manufacturers pay more for goods the higher costs are usually passed on to the consumer. The Industrial Product Price Index (IPPI) reflects the prices that producers in Canada receive as the goods leave the plant gate (wholesale prices), not what what the consumer pays.
Trade Desk Thoughts: According to Statistics Canada, the steep drop in oil prices caused record monthly declines in the industrial product and raw materials price indexes. The Industrial Product Price Index (IPPI) decreased by 2.6%, while the Raw Materials Price Index by 13.4%.
The IPPI's record 2.6% drop in November was the largest of three consecutive monthly declines, as well as the steepest decrease registered since the series was created in 1956. The contraction of prices for petroleum and coal products accelerated for a second straight month, decreasing 18.9% compared with a drop of 13.8% in October. The IPPI would have decreased 3.3% in Novemebr if the 2.7% deprecition of the Canadian dollar had not ocurred because some Canadian producers are paid in dollars.
Forex Technical Reaction: The cad has been falling overnight as crude increased and the pair continued to fall after the reports were released.