Canada Macro Daily(Beta Mode)
BoC Hike Bets Build as Oil Surges, PBO Cuts Growth
Market Snapshot
| Asset | Level | Change |
|---|---|---|
| S&P/TSX | 36,325.00 | +0.60% |
| USD/CAD | 1.41 | -0.28% |
| EUR/CAD | 1.57 | -0.45% |
| WTI Crude | 98.85 | +1.75% |
| Natural Gas | 2.77 | -0.68% |
| Gold | 4,087.40 | -1.51% |
| Brent Crude | 111.63 | +2.58% |
| Bitcoin | 81,784.29 | -2.65% |
| Canada 2Y Govt Yield | 3.32% | -1 bp |
| Canada 10Y Govt Yield | 3.90% | -3 bp |
Prior Economic Events
| Data | Prior | Cons | Actual |
|---|---|---|---|
| No events available | |||
Canada Short-Term Policy Rate | Type: macro_line | Short-term Rate (%): 2.238 (2026-09-01) | Range: 0.1604–5.026 | Trend(6pt): 0.2027,4.29,5.003,2.742,2.265,2.238
Today's Economic Events
| Data | Prior | Cons | Time |
|---|---|---|---|
| No events available | |||
- BoC rate-hike expectations intensify as inflation expectations rise and oil prices climb
- Canadian bond yields fall even as markets price tighter policy; 10Y at 3.90%, 2Y at 3.32%
- PBO slashes 2026 growth forecast to 0.9% with $70.2B peak deficit as U.S. tariffs bite
Yesterday's Recap
Canadian fixed income rallied modestly despite hawkish rate expectations, with the 10-year Government of Canada yield easing 3 bp to 3.90% and the 2-year falling 1 bp to 3.32%, per agency data. The S&P/TSX advanced 0.60% to 36,325.00, supported by energy names as WTI crude jumped 1.75% to $98.85 and Brent surged 2.58% to $111.63 on persistent Hormuz shipping risks. The Canadian dollar strengthened, with USD/CAD falling 0.28% to 1.41 and EUR/CAD down 0.45% to 1.57, as investors stuck to rate-hike bets and the loonie held near a four-week high.
Gold slid 1.51% to $4,087.40 as the oil-driven inflation narrative revived. Bitcoin dropped 2.65% to 81,784.29 amid broader risk-off sentiment. No official Canadian data releases were recorded on the calendar for the session.
The Day Ahead
The calendar is empty of scheduled Canadian statistical releases for October 22, leaving markets to trade on positioning and external catalysts. The Bank of Canada's next interest rate announcement is scheduled for 09:45 ET on an upcoming scheduled date, though no decision falls today. With no domestic prints, CAD and GoC yields will take direction from oil's Hormuz-driven rally and U.S.
session risk sentiment. Traders will continue parsing the BoC's inflation-expectations survey and the PBO's revised fiscal projections for clues on the policy path. Heavy crude differentials also bear watching after the Globe and Mail flagged deepening discounts on a supply glut.
Other Economic Notes
The Parliamentary Budget Officer cut Canada's 2026 growth forecast to 0.9% and warned of a $70.2 billion peak deficit, framing U.S. tariffs as a structural drag on the economy. Food bank use has more than doubled since 2019, underscoring household stress beneath headline aggregates.
Ottawa is directing billions in aid to the steel and auto sectors to cushion tariff-related strain. Canadian heavy oil discounts are deepening as rising oil sands output and returning Venezuelan supply to the U.S. market pressure Western Canadian Select.
These crosscurrents—weak growth, fiscal strain, and energy-sector divergence—complicate the BoC's inflation-fighting stance.
