Canada Macro Daily(Beta Mode)
Canada CPI Rebounds to 3% Led by Gasoline
Market Snapshot
| Asset | Level | Change |
|---|---|---|
| S&P/TSX | nan | +nan% |
| USD/CAD | 1.39 | +0.03% |
| EUR/CAD | 1.61 | +0.03% |
| WTI Crude | 84.04 | -0.54% |
| Natural Gas | 2.71 | +0.71% |
| Gold | 4,447.50 | +0.67% |
| Brent Crude | 90.86 | -0.01% |
| Bitcoin | 64,312.09 | -0.30% |
| 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 |
Canada Unemployment Rate | Type: macro_line | %: 6.4 (2026-07-01) | Range: 4.8–7.1 | Trend(6pt): 7,5,5.7,6.8,6.6,6.4
Today's Economic Events
| Data | Prior | Cons | Time |
|---|---|---|---|
| Housing Starts Level | 239,000 | 248,000 | 04:15 |
| Thursday (2026-08-20) | |||
| New Housing Price Index Month-over-Month | -0.10 | - | 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 | 04:30 |
| Senior Loan Officer Survey | - | - | 06:30 |
- July CPI rose to 3% YoY, led by gasoline rebound and exceeding consensus.
- CAD advanced to two-week high versus USD amid the print.
- Economists see limited BoC reaction despite the upside surprise.
Yesterday's Recap
Canada’s July inflation data surprised to the upside, with the headline rate climbing to 3% year-over-year from 2.8% previously and beating the 2.9% consensus. Core inflation also firmed to 2.3% while the month-over-month rate printed at 0.5%. The Canadian dollar strengthened immediately, reaching a two-week high against the USD at 1.39 and posting a 0.03% daily gain.
Government bond yields reacted sharply, with the 10-year falling 3.43% to 3.42% while the 2-year rose 1% to 2.27%. Energy markets showed mixed moves, with WTI crude declining 0.54% to 84.04 and natural gas rising 0.71% to 2.71. Equity and bitcoin markets posted modest declines, reflecting broader caution ahead of further domestic data.
The inflation print kept focus on the Bank of Canada’s next policy move without shifting immediate market pricing for rate hikes. Housing starts and retail sales data later this week will provide further color on whether the rebound alters the growth outlook.
The Day Ahead
Attention turns to today’s housing starts release, expected at 248,000 units after 239,000 in the prior month. Thursday brings the new housing price index, which has shown persistent monthly declines. Friday features final retail sales figures for June, with the headline expected to slow to 0.4% month-over-month and ex-autos flat.
The Senior Loan Officer Survey will also be released, offering insight into credit conditions. Markets will monitor any commentary around the looming US tariff deadline and its potential impact on Canadian exports. Energy price volatility remains a key variable given its recent contribution to the CPI rebound.
Other Economic Notes
Housing data will test whether recent policy easing has begun to support residential construction after several soft prints. Retail sales weakness would reinforce views that consumer spending remains subdued despite lower borrowing costs. The Senior Loan Officer Survey could highlight any tightening in credit availability that might offset BoC rate cuts.
Broader tariff concerns with the United States continue to weigh on export-oriented sectors and CAD sentiment. Energy commodity swings, particularly gasoline, have re-emerged as a dominant driver of near-term inflation volatility.
