Articles & Reports

In the battle against the last vestiges of inflation, Canada got a somewhat dated, but pleasant bit of news in a look at labour costs in the second quarter.

Trade policy is now front and center in the US federal election, particularly for observers in Canada. Should he win, Donald Trump is promising a turn towards increased protectionism. Kamala Harris has come out against a broad increase in tariffs, but hasn’t been critical of the existing protectionism when it comes to China, and her record as a Senator shows a tilt towards tougher environmental standards in trade deals. A lot is at stake for Canada, but we see reasons to hope that we’ll steer clear of some of the darker scenarios out there.

Canada and the US will each have two “labour days” in the upcoming week, Monday’s traditional holiday, and the financial market version on Friday, when August employment data will be unveiled.

The market is moving to shrug off the post Nvidia earnings malaise. While their revenues may have advanced by 122% from a year ago, beating expectations, the company also increased revenue expectations for the current quarter and announced a share buyback, the stock has struggled as investors were less than enthused by the outlook or by production snags.

There’s not much on the macro front today with both the US and Canadian data calendar empty. Macro takes a backseat as the focus will likely turn to the equity markets with a slew of blue chips reporting today, including Nvidia.

Global equities and rates are roughly rangebound over the weekend. Oil is rallying amid i) further geopolitical tension in the middle east, and ii) a force majeure in Libya amid an attempted take over of their central bank.

Industrial commodities are often cited for what they have to say about the state of the global business cycle. Alan Greenspan was a heavy metal fan, not because he listened to Black Sabbath, but because he judged industrial materials prices as a useful cyclical signpost to supplement economic mainstays like employment and GDP.

The broad USD is slightly weaker as we head into Jackson Hole, with some volatility in USD/JPY after Ueda’s comments overnight were interpreted as slightly hawkish.

Global equities are roughly rangebound, with Japan outperforming and China underperforming. Oil prices have bounced slightly after yesterday’s geopolitical led weakness, meanwhile industrial metals continue to rebound as global growth expectations recover.

Our latest In Focus article, by Avery Shenfeld, looks at market-based indicators and what they imply about investors' views on recession risks for the US economy.

Global equities are relatively rangebound over the weekend, with European shares leading the way and S&P futures roughly flat. Elsewhere global rates and most commodities are roughly flat.

It should be a relatively quiet session with most macro data already out of the way this week. Risk sentiment improves after yesterday’s strong retail sales number, with equity futures in the green this morning on diminishing US recessionary concerns.

A softer labour market and reduced pricing power should have businesses being less generous with wage offers. That’s of some importance to the inflation outlook, and it’s what we’re seeing in the US. But what’s up with wage inflation in Canada?

The key dynamics in the upcoming session centre on latest US retail spending data alongside continuing jobless claims, albeit not covering the payrolls survey period.