Canada Macro Daily(Beta Mode)
Canada CPI Tops Forecasts as Housing Weakens
Market Snapshot
| Asset | Level | Change |
|---|---|---|
| S&P/TSX | 36,401.80 | +0.09% |
| USD/CAD | 1.39 | +0.20% |
| EUR/CAD | 1.61 | +0.04% |
| WTI Crude | 87.07 | +1.44% |
| Natural Gas | 2.76 | -2.03% |
| Gold | 4,541.10 | +1.15% |
| Brent Crude | 94.19 | +2.81% |
| Bitcoin | 72,246.51 | +4.30% |
| Canada 2Y Govt Yield | 2.27% | +1.00% |
| Canada 10Y Govt Yield | 3.42% | -3.43% |
Prior Economic Events
| Data | Prior | Cons | Actual |
|---|---|---|---|
| Inflation Rate Year-over-Year | 2.80 | 2.90 | 3 |
| Core Inflation Rate Year-over-Year | 2.10 | - | 2.30 |
| Inflation Rate Month-over-Month | -0.40 | 0.40 | 0.50 |
| Housing Starts Level | 240,800 | 248,000 | 229,100 |
Canada Housing Starts | Type: macro_line | Units (000s): -13.48 (2026-07-01) | Range: -25.68–23.75 | Trend(6pt): 6.993,-15.99,1.473,3.778,-8.301,-13.48
Today's Economic Events
| Data | Prior | Cons | Time |
|---|---|---|---|
| New Housing Price Index Month-over-Month | -0.10 | 0 | 04:30 |
| Friday (2026-08-21) | |||
| Retail Sales Month-over-Month Final | 1 | 0.40 | 04:30 |
| Retail Sales Month-over-Month Preliminary | 1 | - | 04:30 |
| Retail Sales excluding Autos Month-over-Month | 1.20 | 0.40 | 04:30 |
| Senior Loan Officer Survey | - | - | 06:30 |
- Headline CPI rose to 3% YoY in July, above the 2.9% consensus, while core inflation climbed to 2.3%.
- Housing starts dropped to 229,100, missing expectations and signaling further softening in residential construction.
- The S&P/TSX edged up 0.09% while USD/CAD rose 0.20% to 1.39 amid higher oil prices.
Yesterday's Recap
Canadian inflation data surprised to the upside on August 19. The headline CPI rate reached 3% year-over-year against a 2.9% consensus and 2.8% prior reading. Core inflation increased to 2.3% while the month-over-month rate printed at 0.5%.
Housing starts fell sharply to 229,100 units, well below the 248,000 consensus. Equity markets showed limited reaction as the S&P/TSX gained just 0.09%. The Canadian dollar weakened, with USD/CAD rising 0.20% to 1.39 even as WTI crude advanced 1.44% to 87.07.
Canada 10-year yields declined 3.43% to 3.42% while the 2-year yield rose 1.00% to 2.27%. Energy prices lifted Brent crude 2.81% to 94.19, supporting export revenues despite the hotter inflation print.
The Day Ahead
Attention turns to the New Housing Price Index release at 4:30 ET on August 20. The index is expected to show no monthly change after last month’s 0.1% decline. Tomorrow brings final and preliminary retail sales figures for June along with the Senior Loan Officer Survey.
Markets will monitor whether softer housing data offsets the hotter inflation print in shaping rate expectations. Energy prices remain a key driver for CAD crosses given ongoing geopolitical supply concerns. The Bank of Canada’s next policy decision is scheduled for September.
Other Economic Notes
Elevated oil prices continue to support Canadian export revenues and government finances despite the stronger CPI reading. The 3.03% verified CPI level keeps price pressures above the Bank of Canada’s 2% target. Government of Canada bond yields reflect mixed signals, with the long end rallying on growth concerns while the front end prices in fewer cuts.
TSX performance remains anchored to energy and financials, with limited breadth outside those sectors. Broader Canadian data continue to point to a gradual slowdown in domestic demand.
Global Macro News
Oil prices rose on Middle East supply risks and renewed U.S. tariff threats against Iran, lifting Brent to 94.19. The Canadian dollar gained some support from fading U.S.
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