Canada Macro Daily(Beta Mode)
BoC Set to Hold at 2.25% Amid Trade Risks
Market Snapshot
| Asset | Level | Change |
|---|---|---|
| S&P/TSX | 35,825.70 | -1.23% |
| USD/CAD | 1.39 | +0.55% |
| EUR/CAD | 1.61 | +0.19% |
| WTI Crude | 89.67 | -0.61% |
| Natural Gas | 2.93 | +0.79% |
| Gold | 4,369.00 | +0.48% |
| Brent Crude | 94.33 | -0.34% |
| Bitcoin | 76,651.80 | -0.97% |
| Canada 2Y Govt Yield | 2.27% | +1.00% |
| Canada 10Y Govt Yield | 3.42% | -3.43% |
Prior Economic Events
| Data | Prior | Cons | Actual |
|---|---|---|---|
| S&P Global Manufacturing PMI Index | 53.50 | - | 53 |
Canada Unemployment Rate | Type: macro_line | Percent: 6.4 (2026-07-01) | Range: 4.8–7.1 | Trend(6pt): 6.5,5,5.9,6.9,6.5,6.4
Today's Economic Events
| Data | Prior | Cons | Time |
|---|---|---|---|
| BoC Interest Rate Decision | 2.25 | 2.25 | 05:45 |
| Press Conference by BoC | - | - | 06:30 |
| Thursday (2026-09-03) | |||
| Trade Balance | 3,860m | 3,600m | 04:30 |
| Friday (2026-09-04) | |||
| Unemployment Rate | 6.40 | 6.40 | 04:30 |
| Employment Change | 75,100 | 15,000 | 04:30 |
| Full-Time Employment Change | 38,600 | - | 04:30 |
| Labor Force Participation | 65.10 | - | 04:30 |
| Part-Time Employment Change | 36,600 | - | 04:30 |
- BoC set to hold policy rate at 2.25% for seventh consecutive meeting
- Manufacturing PMI slips to 53.0 while inflation reaches 3.03%
- TSX drops 1.23% as USD/CAD rises 0.55% to 1.39
Yesterday's Recap
S&P Global Manufacturing PMI eased to 53.0 in August from 53.5, signaling modest cooling in factory activity. Equity markets sold off sharply with the S&P/TSX closing 1.23% lower at 35,825.70 amid higher oil prices and softer risk sentiment. The Canadian dollar weakened, lifting USD/CAD 0.55% to 1.39 while EUR/CAD advanced 0.19%.
Government of Canada 10-year yields fell 3.43% to 3.42% as 2-year yields edged up 1.00% to 2.27%. News flow highlighted Canada’s CPI reaching 3.03% with gasoline prices surging 25.7%, yet markets priced in a steady 2.25% policy rate. The Bank of Canada also unveiled its new vertical $20 bank note design.
Energy prices showed mixed moves, with WTI crude down 0.61% at 89.67 while natural gas rose 0.79%. Broader equity weakness extended to Bitcoin, which fell 0.97% to 76,651.80, while Brent crude eased 0.34% to 94.33.
The Day Ahead
The Bank of Canada will announce its sixth rate decision of 2026 at 05:45 ET, with consensus pointing to an unchanged 2.25% target. Governor Tiff Macklem will hold a press conference at 06:30 ET to outline the Governing Council’s assessment of growth, inflation and external risks. Thursday brings the July trade balance, expected to narrow to C$3.6 billion from C$3.86 billion.
Friday’s labour-force survey will receive close attention, with unemployment forecast to hold at 6.4% and employment gains projected at 15,000. The Ivey PMI is also due Friday morning at a consensus 56.2. Markets will parse any fresh commentary on tariff threats and their potential pass-through to Canadian prices and exports.
Other Economic Notes
Strong domestic growth continues to collide with renewed trade uncertainty, particularly potential U.S. tariff measures. Gasoline-driven inflation at 3.03% has not altered expectations for policy stability, reflecting the Bank’s focus on underlying trends rather than volatile energy components.
Dividend sustainability among major banks, including Royal Bank of Canada, underscores resilient corporate balance sheets despite equity-market volatility. Broader fiscal and immigration policy adjustments are also influencing medium-term labour-supply dynamics and housing demand. The committee voted to hold the policy rate steady given contained core pressures.
