| Asset | Level | Change |
|---|---|---|
| S&P/TSX | 32,541.93 | -0.91% |
| USD/CAD | 1.37 | +0.39% |
| EUR/CAD | 1.57 | +0.06% |
| WTI Crude | 97.34 | -1.39% |
| Natural Gas | 3.08 | -1.69% |
| Gold | 5,004.00 | -0.96% |
| Brent Crude | 98.50 | -4.50% |
| Bitcoin | 73,682.15 | +1.23% |
| Canada 2Y Govt Yield | 2.25% | -0.06% |
| Canada 10Y Govt Yield | 3.40% | +0.41% |
| Data | Prior | Cons | Actual |
|---|---|---|---|
| No events available | |||
| Data | Prior | Cons | Time |
|---|---|---|---|
| Housing Starts Level | 238,000 | 245,000 | 04:15 |
| Inflation Rate Year-over-Year | 2.30 | - | 04:30 |
| Core Inflation Rate Year-over-Year | 2.60 | - | 04:30 |
| Inflation Rate Month-over-Month | 0 | 0.60 | 04:30 |
| Wednesday (2026-03-18) | |||
| BoC Interest Rate Decision | 2.25 | 2.25 | 05:45 |
| BoC Press Conference | - | - | 06:30 |
| Friday (2026-03-20) | |||
| New Housing Price Index Month-over-Month | -0.40 | -0.30 | 04:30 |
| Retail Sales Excluding Autos Month-over-Month | 0.10 | 1.30 | 04:30 |
Canadian markets closed lower yesterday amid disappointing February employment data, with the S&P/TSX Composite falling 0.91% to 32,541.93, pressured by losses in energy and materials sectors. The economy lost 84,000 jobs, far worse than expectations, driving the unemployment rate up to 6.7% and signaling labor market weakness that could influence Bank of Canada policy. USD/CAD strengthened 0.39% to 1.37, reflecting a softer loonie as rate cut bets increased on the jobs miss.Energy prices weighed on sentiment, with WTI Crude dropping 1.39% to 97.34 and Brent Crude plunging 4.50% to 98.50, amid global supply concerns. Government bond yields diverged, with the 10-year rising 0.41% to 3.40% while the 2-year eased 0.06% to 2.25%, mirroring mixed inflation outlooks. Gold fell 0.96% to 5,004.00, and Natural Gas declined 1.69% to 3.08, adding to commodity-driven volatility in Canadian equities.
Today's calendar features key releases including Housing Starts at 04:15 ET, expected at 245,000 versus prior 238,000, which could signal housing sector resilience amid high rates. At 04:30 ET, February inflation data arrives, with YoY rate consensus absent but prior at 2.32%, and MoM expected at 0.6% from 0%; core YoY prior was 2.6%. These prints will be critical ahead of Wednesday's BoC decision, potentially swaying forward guidance on rates.Wednesday brings the BoC Interest Rate Decision at 05:45 ET, consensus for hold at 2.25%, followed by a press conference at 06:30 ET. Friday rounds out the week with New Housing Price Index MoM expected at -0.3% and Retail Sales MoM at 1.5%, offering insights into consumer spending trends.
Broader Canadian economic themes highlight labor market deterioration, with February's job losses exacerbating concerns over slowing growth and persistent unemployment at 6.7%. Housing affordability remains strained, as evidenced by upcoming starts and price index data, amid elevated mortgage rates and supply shortages. Energy sector dynamics, tied to volatile oil prices, continue to impact export revenues and inflation passthrough, with UBS warning of consumer squeeze from rising crude costs.
Global oil prices are under pressure from Middle East tensions, contributing to Brent's sharp 4.50% drop and influencing Canada's energy-dependent economy. U.S. inflation spillover effects are evident, with Canadian bond yields reacting to cross-border data, as seen in the 10-year's uptick.Currency markets show CAD underperforming, with USD/CAD gains amid broader dollar strength and job data weakness. Bitcoin's 1.23% rise to 73,682.15 reflects crypto optimism, but offers little direct support to Canadian markets. European weakness, via EUR/CAD's minimal 0.06% change, adds to cautious sentiment ahead of ECB moves.Overall, these factors intensify focus on BoC's response to imported inflation and growth headwinds.
The Bank of Canada maintained its policy rate at 2.25% in the January decision, aligning with forward guidance emphasizing data-dependent adjustments amid balanced inflation risks. Recent communications highlight vigilance on shelter costs and wage pressures, though softer February jobs data may temper hawkish tones. The latest Monetary Policy Report projected core inflation easing toward target, but oil-driven risks cloud the outlook, as noted in expert polls expecting a hold on Wednesday.Quantitative tightening continues apace, with balance sheet runoff supporting gradual normalization without disrupting markets. This stance implies steady CAD crosses and bond yields, but a dovish pivot could emerge if inflation data today undershoots, boosting rate cut odds for later in 2026. Markets interpret the committee's hold as prioritizing growth support, given unemployment's rise to 6.7%.