| Asset | Level | Change |
|---|---|---|
| S&P/TSX | 32,876.65 | +1.03% |
| USD/CAD | 1.37 | -0.08% |
| EUR/CAD | 1.58 | +0.61% |
| WTI Crude | 95.60 | +2.25% |
| Natural Gas | 3.05 | +0.93% |
| Gold | 5,004.60 | +0.21% |
| Brent Crude | 103.04 | +2.82% |
| Bitcoin | 73,912.52 | -1.27% |
| Canada 2Y Govt Yield | 2.25% | +0.00% |
| Canada 10Y Govt Yield | 3.29% | -3.35% |
| Data | Prior | Cons | Actual |
|---|---|---|---|
| Housing Starts Level | 250,900 | 252,500 | 238,500 |
| Inflation Rate Year-over-Year | 2.30 | 1.90 | 1.80 |
| Core Inflation Rate Year-over-Year | 2.60 | - | 2.30 |
| Inflation Rate Month-over-Month | 0 | 0.70 | 0.50 |
| Data | Prior | Cons | Time |
|---|---|---|---|
| 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 |
| Retail Sales Month-over-Month Final | -0.40 | 1.50 | 04:30 |
| Retail Sales Month-over-Month Prel | 1.50 | - | 04:30 |
Canadian economic data on March 16 revealed softer-than-expected inflation, with headline CPI dropping to 1.8% YoY from 2.3% prior, undershooting the 1.9% consensus due to favorable base effects and moderated shelter costs. Core inflation eased to 2.3% YoY from 2.6%, while monthly CPI rose 0.5% against a 0.7% forecast, highlighting persistent but cooling price dynamics. Housing starts fell to 238,500 annualized units, below the 252,500 expectation and prior 250,900, underscoring challenges in the real estate sector amid high borrowing costs.The S&P/TSX Composite climbed 1.03% to 32,876.65, buoyed by energy stocks as WTI crude surged 2.25% to $95.60 and Brent rose 2.82% to $103.04 on geopolitical supply concerns. USD/CAD dipped 0.08% to 1.37, reflecting CAD resilience from oil strength, while EUR/CAD gained 0.61% to 1.58 amid broader FX volatility. Canada 10Y government yields declined 3.35% to 3.29%, pricing in dovish BoC expectations, though the 2Y yield held steady at 2.25%.Natural gas edged up 0.93% to $3.05, and gold rose 0.21% to $5,004.60, supporting commodity-linked equities.
Attention turns to the Bank of Canada's interest rate decision on March 18, with consensus expecting the policy rate to remain at 2.25%, followed by a press conference that could provide forward guidance on inflation and growth risks. No major data releases are scheduled for March 17, allowing markets to digest yesterday's CPI miss and position ahead of the BoC announcement. On March 20, retail sales data will offer insights into consumer spending, with MoM final expected at 1.5% and ex-autos at 1.3%, potentially influencing sentiment on economic resilience.The new housing price index MoM is forecast at -0.3%, continuing to signal softness in property values. Preliminary retail sales MoM lacks a consensus but follows a 1.5% prior, which could highlight spending trends amid easing inflation.
Broader Canadian economic themes include persistent housing market weakness, as evidenced by the latest starts data, which may pressure GDP growth if construction activity remains subdued. (cont...)
Rising oil prices, driven by global tensions, are bolstering energy exports but risking imported inflation, particularly with surging gas prices threatening to reverse recent CPI progress. Household debt levels remain elevated, underscoring vulnerability to rate changes and potential constraints on consumption.
Global oil prices surged, with WTI up 2.25% and Brent 2.82%, amid Middle East tensions and OPEC+ cut rumors, supporting Canada's energy sector and CAD but raising inflation risks for importers. The U.S. dollar weakened broadly, contributing to USD/CAD's 0.08% decline, as markets anticipated softer Fed policy amid mixed U.S.data. European currencies strengthened against CAD, with EUR/CAD up 0.61%, reflecting ECB stability contrasts with BoC's dovish tilt. Bitcoin fell 1.27% to $73,912.52, signaling crypto volatility that could indirectly affect Canadian investor sentiment through wealth effects.Gold's modest 0.21% gain highlights safe-haven demand amid geopolitical uncertainties, benefiting Canada's mining exports.
The Bank of Canada is widely expected to maintain its policy rate at 2.25% in the March 18 decision, aligning with consensus and recent communications emphasizing a data-dependent approach amid cooling inflation. February's CPI print of 1.8% YoY, below expectations, supports the BoC's view that price pressures are easing, potentially paving the way for future cuts if growth weakens further. Forward guidance from prior Monetary Policy Reports has highlighted balanced risks, with quantitative tightening ongoing to normalize the balance sheet without disrupting markets.Recent statements suggest the committee will hold steady to monitor oil-driven inflation threats and housing softness. The upcoming press conference may clarify views on global conflicts and trade uncertainties. This stance reflects caution against premature easing, given core inflation at 2.3% YoY and elevated household debt, aiming to anchor expectations near the 2% target.