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EnglishپارسیEnglishپارسیCanada’s economy shrank in Q4, missing expectations and marking a sharp slowdown from the prior quarter, even as December activity still showed a modest gain.
Why it matters: A negative Q4 print strengthens the case that Canada’s economy is losing momentum, which can increase sensitivity to rate expectations and keep the BoC under pressure if the soft patch persists. The flat preliminary read for January suggests the rebound is not yet convincing.
Source: Statistics Canada
Canada’s current account swung to a much smaller deficit in Q4, a notable improvement versus both expectations and the prior quarter, while wage growth slowed.
Why it matters: a smaller external deficit can be CAD-supportive at the margin, while softer earnings growth hints at cooling wage pressure—relevant for BoC inflation dynamics.
Source: Statistics Canada (as reported)
Canada’s preliminary wholesale sales fell in January, reversing the prior month’s strength.
Why it matters: weaker wholesale activity can feed into softer near-term GDP tracking, especially if inventories and manufacturing are also cooling.
Source: Statistics Canada
Canada’s preliminary manufacturing data pointed to a sharp pullback at the start of the year.
Why it matters: A drop of this size can weigh on near-term industrial output and GDP tracking, especially if the weakness proves broad-based across subsectors.
Source: Statistics Canada
Canada’s BoC Senior Loan Officer Survey showed a tighter credit tone in Q4, with the reading rising to 2.8 from 0.7—suggesting lending conditions became more restrictive.
Market lens: Tighter credit typically acts as a growth headwind and can substitute for some rate tightening, depending on how sustained it is.
Source: Bank of Canada (Senior Loan Officer Survey).
Canada’s retail activity softened at year-end, with headline retail sales falling -0.4% MoM in December (vs -0.5% expected; prior +1.2%). But the underlying picture was a touch firmer: core retail sales rose +0.1% MoM (vs -0.1% expected; prior +1.6%).
Market lens: The split suggests the pullback was concentrated in more volatile categories, while core demand held up slightly better—important for near-term growth tracking and BoC expectations.
Source: Statistics Canada.
Canada’s producer pipeline pressures flared up in January, with a sharp upside surprise in raw materials. The Raw Materials Price Index (RMPI) surged +7.7% MoM (vs +0.7% expected; prior +0.3%) and rose +8.0% YoY (prior +3.5%). At the factory gate, the Industrial Product Price Index (IPPI) also surprised higher, rising +2.7% MoM (vs +0.2% expected; prior -0.9%) and accelerating to +5.4% YoY (prior +4.3%).
Market lens: A re-acceleration in RMPI/IPPI can feed into future CPI prints with a lag, potentially complicating the near-term disinflation narrative and keeping BoC pricing sensitive to commodity and input-cost trends.
Source: Statistics Canada (RMPI, IPPI).
Canada’s December trade flows showed stronger exports alongside a smaller increase in imports. Exports climbed to C$65.63B (from C$63.95B), while imports rose to C$66.93B (from C$66.53B).
Market lens: With exports rising faster than imports, the data is consistent with a narrower trade gap, offering a mild near-term support signal for growth—though FX reaction still hinges on rates and risk sentiment.
Source: Statistics Canada.
Canada’s trade balance improved in December, with the deficit shrinking to -C$1.31B (vs -C$2.10B expected; prior -C$2.59B). But housing price pressures persisted: the New Housing Price Index (MoM) fell -0.4% in January (vs +0.1% expected; prior -0.2%).
Source: Statistics Canada.
Canadians bought fewer foreign securities in December, with foreign securities purchases by Canadians at C$13.060B, down from C$16.950B previously—signaling a cooler pace of outbound portfolio flows.
Market lens: Slower outbound buying can modestly reduce one source of FX flow pressure, but the CAD impact still depends on broader risk sentiment and rate differentials.
Canada’s January inflation data came in softer and broadly supportive of the disinflation trend. Headline CPI eased to 2.3% YoY (vs 2.4% expected; prior 2.4%) and was flat on the month at 0.0% MoM (vs 0.1% expected; prior -0.2%). Core signals also cooled: Core CPI 2.6% YoY (prior 2.8%) with Core CPI +0.2% MoM (prior -0.4%). BoC core trims softened as well: Trimmed 2.4% YoY (vs 2.6% expected; prior 2.7%), Median 2.5% YoY (in line; prior 2.6%), and Common 2.7% YoY (in line; prior 2.8%).
Outside inflation, the mix was split: Wholesale sales rose 2.0% MoM in December (vs 2.1% expected; prior -1.8%), but foreign securities purchases swung to -$5.57B (vs +$14.27B expected; prior +$15.96B), a notable risk-off/flow signal.
Market lens: Softer inflation supports a more dovish BoC bias, while the sudden capital-flow reversal can add near-term sensitivity for CAD.
Canada’s January housing starts fell short of forecasts at 238.0K, below 266.0K expected and down from 280.7K previously—pointing to a softer construction pulse.