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Canada’s fiscal data showed a much stronger budget position in February. Budget Balance came in at 5.66B, a sharp improvement from the previous -5.07B deficit. On an annual basis, Budget Balance (YoY) stood at -25.55B, better than the previous -31.21B. The figures suggest Canada’s public finances improved meaningfully in February, with both the monthly balance and the annual deficit showing a better result than in the previous reading.

Importance: Low

Possible Market Effect: The improved budget position is mildly supportive for Canada’s fiscal outlook, though the direct market effect is likely limited unless the improvement continues over the coming months.

Source: Department of Finance Canada

Canada’s retail data remained soft. Core Retail Sales (MoM) rose 0.5% in February, below the 0.8% forecast and down from 1.0% previously. Retail Sales (MoM) increased 0.7% in February, also below the 0.9% forecast and weaker than the prior 1.2%. For March, the preliminary estimate showed Retail Sales (MoM) at 0.6%, below the previous 0.7%. The combined data suggest consumer spending remained positive, but momentum cooled and fell short of expectations.

Importance: Low

Possible Market Effect: Softer retail momentum may modestly reduce optimism on Canada’s consumption outlook and keep rate expectations balanced rather than more hawkish.

Source: Statistics Canada

Canada’s March producer-price data showed a sharp acceleration in upstream price pressure. RMPI rose 12.0% month-on-month, far above the 9.3% forecast and sharply up from 0.9% previously, while RMPI jumped 23.6% year-on-year from 9.1%. At the same time, IPPI rose 2.4% MoM, beating the 1.6% forecast and accelerating from 0.6%, while IPPI increased 7.8% YoY from 5.6%. The data show a strong broad-based rise in raw material and industrial producer prices.

Importance: Medium

Possible Market Effect: The stronger producer-price mix may keep inflation concerns alive in Canada and could support Canadian yields if markets see a risk of pass-through into consumer prices.

Source: Statistics Canada

Canada’s New Housing Price Index (MoM) fell 0.2% in March, missing the 0.2% forecast and reversing from the previous 0.3% increase. The negative reading suggests pricing conditions in the new-home market weakened at the end of the first quarter. The shift from positive to negative territory points to softer housing-market pricing power and a less supportive demand backdrop.

Importance: Low

Possible Market Effect: The weaker housing-price reading is mildly negative for the Canadian housing outlook and may reinforce the view that residential price momentum remains fragile.

Source: Statistics Canada

Canada’s March inflation data showed firmer headline pressure but softer details in some core measures. CPI rose 0.9% MoM, below the 1.1% forecast but above the previous 0.5%. CPI rose 2.4% YoY, up from 1.8% previously but slightly below the 2.5% forecast. In core measures, Core CPI rose 0.2% MoM versus 0.4% previously, while Core CPI rose 2.5% YoY from 2.3%. The Bank of Canada’s preferred measures were mixed: Common CPI came in at 2.6% versus 2.4% previously, Median CPI held at 2.3% versus 2.4% expected, and Trimmed CPI slowed to 2.2% from 2.3%. Overall, headline inflation strengthened, but underlying inflation did not broadly re-accelerate.

Importance: Medium

Possible Market Effect: The data may keep Bank of Canada expectations balanced rather than clearly hawkish, because stronger headline inflation was offset by softer median and trimmed core readings.

Source: Statistics Canada

Importance: Low

Canada’s cross-border securities flows weakened noticeably in February. Foreign securities purchases of Canadian assets fell to 6.17B, far below the 23.81B forecast and down sharply from 46.79B previously. At the same time, foreign securities purchases by Canadians rose to 25.36B from 11.42B. The shift shows external demand for Canadian securities cooled sharply, while Canadian investors increased their purchases of foreign assets.

Possible Market Effect:

This is a softer signal for Canada’s capital-flow backdrop. Weaker foreign demand for Canadian securities can limit support for the Canadian dollar at the margin, especially when domestic investors are sending more money abroad.

Importance: Medium

Canada’s housing starts came in at 235.9K in March, below the 258.0K forecast and down from 251.0K previously. The decline points to slower homebuilding momentum and suggests residential construction lost some pace at the end of the quarter. Reuters reported that the March reading marked an unexpected monthly decline.

Possible Market Effect:

This is mildly negative for the near-term Canadian housing outlook. A softer start to reading can weigh on construction sentiment and keep the market cautious on residential activity.

Importance: Medium

Canada’s new motor vehicle sales rose to 124.0K in February from 114.4K previously, pointing to a better month for vehicle demand after a weaker prior reading. The improvement suggests auto sales activity recovered in February, adding to signs that parts of Canada’s goods and consumer sectors stabilized during the month. Statistics Canada’s official vehicle-sales table was updated in mid-April for the latest monthly reading.

Possible Market Effect:

This is mildly supportive for Canada’s consumer and auto-related activity outlook, although by itself it is unlikely to be a major market mover. Continued improvement would be more meaningful if it is confirmed by broader retail and manufacturing data.

Source: Statistics Canada, New motor vehicle sales, monthly (Table 20-10-0085-01).

Importance: Medium

Canada’s goods-sector activity improved in February. Wholesale sales rose 2.0% month-on-month, a solid rebound after -1.1% previously, though slightly below the 2.3% expectation. Manufacturing sales also climbed 3.6% month-on-month, recovering from -3.1% in January but still just under the 3.8% forecast. Together, the figures point to a better month for Canadian goods activity, even if both reports landed a little below market expectations.

Possible Market Effect:

This is mildly supportive for the near-term Canadian growth outlook because both wholesale and factory sales returned to positive territory. Still, the slight miss versus forecasts may limit any stronger positive market reaction.

Source: Statistics Canada.

Importance: Medium

Canada’s building permits fell 8.4% month-on-month in February, a clear downside surprise against the -0.4% forecast, after a 3.5% increase previously. The release points to a notable slowdown in construction intentions at the start of the year. Statistics Canada said the February decline was driven mainly by the non-residential sector, while the residential side offered only a partial offset.

Possible Market Effect:

This is mildly negative for the near-term Canadian growth outlook and can weigh on construction-related sentiment. On its own, it is unlikely to shift Bank of Canada expectations sharply, but it does add to signs of softer domestic momentum.

Source: Statistics Canada.

Importance: High

Canada’s March labor-market data were broadly constructive. The Unemployment Rate fell to 6.7%, below the forecast of 6.8% and unchanged from the previous 6.7%. Employment Change came in at 14.1K, slightly below the forecast of 14.5K, but a clear improvement from the previous -83.9K. This shows that overall job growth returned after a sharp prior-month contraction.

Under the surface, the composition was mixed. Part-time employment change rose 15.2K, down from 24.5K previously, while full-time employment change was -1.1K, which was still negative but far better than the previous -108.4K. Avg hourly wages Permanent employee accelerated to 5.1% from 4.2%, showing firmer wage growth, while the Participation Rate held steady at 64.9%.

Taken together, the report suggests that Canada’s labor market stabilized in March, with unemployment slightly better than expected, hiring turning positive again, and wage growth strengthening. The still-negative full-time figure is a soft point, but the scale of deterioration was far smaller than in the previous month.

Possible Market Effect: The combination of lower unemployment, renewed job growth, and faster wage gains may support a less dovish interpretation of the Bank of Canada outlook and could be modestly supportive for the Canadian dollar.

Source: Statistics Canada

Medium importance

Canada’s Thomson Reuters IPSOS PCSI fell to 45.59 in April from 49.37 previously. With no forecast visible, the latest reading points to a further deterioration in consumer sentiment. The drop suggests households turned more cautious and that confidence weakened materially compared with the prior month.

Possible Market Effect: The data may reinforce a softer tone around Canada’s household-demand outlook if weak sentiment persists.

Source: Thomson Reuters / Ipsos