| Asset | Level | Change |
|---|---|---|
| S&P/TSX | 31,854.98 | -1.42% |
| USD/CAD | 1.37 | -0.06% |
| EUR/CAD | 1.59 | +0.85% |
| WTI Crude | 95.34 | -0.83% |
| Natural Gas | 3.12 | -1.42% |
| Gold | 4,659.30 | +1.27% |
| Brent Crude | 104.91 | -3.44% |
| Bitcoin | 70,742.30 | +1.19% |
| 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 |
| BoC Interest Rate Decision | 2.25 | 2.25 | 2.25 |
| BoC Press Conference | - | - | - |
| Data | Prior | Cons | Time |
|---|---|---|---|
| New Housing Price Index Month-over-Month | -0.40 | -0.30 | 04:30 |
| Retail Sales Excluding Autos Month-over-Month | 0.10 | 1.20 | 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 released earlier in the week showed February inflation cooling to 1.8% year-over-year, missing the 1.9% consensus and down from January's 2.3%, driven by lower energy costs. Core inflation moderated to 2.3% YoY, while monthly CPI rose 0.5%, below the expected 0.7%. Housing starts for February came in at 238,500 units, underperforming the 252,500 forecast and signaling ongoing weakness in residential construction amid high borrowing costs.The Bank of Canada held its overnight rate at 2.25% in its March decision, with the subsequent press conference emphasizing caution due to elevated oil prices and global uncertainties. Market reactions included a 1.42% decline in the S&P/TSX Composite to 31,854.98, pressured by falling energy stocks as WTI crude dropped 0.83% to $95.34 and Brent fell 3.44% to $104.91. USD/CAD edged down 0.06% to 1.37, while the 10-year government bond yield decreased 3.35% to 3.29%, reflecting bets on potential future easing.Gold rallied 1.27% to $4,659.30, benefiting from safe-haven demand amid broader market volatility.
Today's calendar features key releases at 4:30 ET, including the February New Housing Price Index month-over-month, with consensus at -0.3% following January's -0.4%. Retail sales data for January will also be out, with the final month-over-month figure expected at 1.5% after December's -0.4%. Excluding autos, retail sales are forecasted to rise 1.2% MoM from 0.1% previously, providing insights into consumer spending resilience.A preliminary retail sales MoM for February is due without a consensus estimate, potentially signaling early trends amid cooling inflation. These indicators could influence CAD crosses and TSX consumer sectors, especially if they underscore economic softening. No major BoC events are scheduled, but markets will watch for any ripple effects from global oil dynamics.
A recent study highlights that boosting Canada's oil export capacity could add over $30 billion annually to GDP, underscoring the energy sector's role in economic growth amid pipeline constraints. (cont...)
Discussions around Canada's GDP per capita crisis point to structural challenges like productivity lags and housing affordability issues eroding living standards. Fiscal announcements, such as potential green energy subsidies, aim to diversify the economy but raise concerns about budget deficits in a high-rate environment.
Geopolitical tensions from the Iran war are clouding global inflation outlooks, with high oil prices surging Brent above $100 and pressuring central banks like the Riksbank to hold rates steady. The Federal Reserve maintained its stance amid mixed U.S. signals and war-related uncertainties, influencing cross-border flows into Canadian assets.Elevated energy costs are weighing on currencies like the Philippine peso, which breached 60 per dollar, while the yen nears 160 amid stock declines, highlighting broader commodity-driven volatility. In Europe, diesel prices are rising due to the US-Israeli conflict, potentially spilling over to Canadian trade partners. Canadian dollar outperformed peers despite cooling oil, supported by relative economic stability.Global treasury yields, including U.S. ones, are sliding on inflation fears, bolstering demand for Canadian bonds. Ride-hailing adaptations to fuel costs reflect supply chain disruptions affecting Canada's export sectors.Overall, these dynamics amplify risks to Canada's energy-dependent economy, with Bitcoin's 1.19% gain to $70,742.30 offering a hedge amid fiat currency pressures.
The Bank of Canada held its policy rate at 2.25% in the March 18 decision, aligning with consensus and emphasizing a data-dependent approach in its statement, without signaling imminent cuts. The press conference reiterated concerns over persistent inflation risks from high oil prices and the Iran war, as noted in recent communications, suggesting the bank would lean toward easing absent these factors. Forward guidance from the Monetary Policy Report highlights balanced risks, with quantitative tightening continuing to normalize the balance sheet, though at a measured pace to avoid market disruptions.This stance supports a stable CAD and lower long-end yields, as seen in the 10-year at 3.29%, but markets now price in delayed cuts, potentially into mid-2026. Governing Council commentary, including from economists like CIBC's Benjamin Tal, interprets the hold as cautious amid economic uncertainty, with no vote split details disclosed. These elements imply sustained support for resource sectors while monitoring global spillovers for future adjustments.