OIL: US Crude Stock Build Reported But Mixed Products

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Among non-Canadian institutions, analyst expectations are primarily that that the BOC has one or two more cuts left beyond this week's decision, ranging from a 2.00% to 2.50% terminal rate.

• We will publish our BOC preview Tuesday after the August CPI release, with any updates on analyst view changes after the inflation data is digested.
• See analyst views and commentary below. 

• As for soft indicators, the recovery off lows in consumer confidence has stalled in the Conference Board survey and has recently weakened again in the University of Michigan survey.
• There are the well-known issues with limited correlation to actual consumer spending but anecdotally the consumer isn’t giving signs of optimism. That’s in part due to labor market concerns and elevated perceived probabilities of losing one’s job.
• Businesses are pointing to at least some grounds for optimism though.
• The manufacturing ISM survey may have disappointed in the latest two reports since the July FOMC meeting, with the 48.7 in August near unchanged from 49.0 back in June, but the new orders sub-component lift to 51.4 in August for its highest since Jan 2025 and off a pre-reciprocal tariff announcement low of 45.2 in March. That said, we don’t downplay the fact that there have still only been two >50, i.e. in theory expansionary, readings since Oct 2022 (back in Jan-Feb 2025).
• The services ISM survey was more clearly encouraging however, surprisingly rising to 52.0 in August for its highest since February, and a small improvement from the 50.8 back in June. It was led by new orders jumping nearly 6pts to 56.0 for the highest since Oct 2024.