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Canada’s Industrial Product Price Index (IPPI) rose 0.8% month-on-month in September, well above the 0.2% increase seen previously. On a yearly basis, IPPI jumped 5.5%, accelerating sharply from 3.7% in August. Similarly, the Raw Materials Price Index (RMPI) surged 1.7% month-on-month, rebounding from a 0.8% drop, while annual growth jumped to 8.4% from 3.0%, driven largely by higher crude oil and metal prices.

The stronger price momentum reflects renewed cost pressures in energy and manufacturing inputs, suggesting potential upstream inflation risks for producers. While the Bank of Canada continues to monitor disinflation at the consumer level, these data may complicate the outlook if producer costs start feeding through to broader prices later in the year.

Market impact: Mildly positive for CAD; stronger producer and raw material prices bolster expectations of persistent inflation, supporting the case for a cautious monetary stance.

Canada saw net foreign inflows rise sharply in August, with foreign investors purchasing C$25.92 billion in Canadian securities, more than double July’s C$11.61 billion, signaling sustained confidence in domestic assets. Meanwhile, Canadian investors increased their purchases of foreign securities to C$19.51 billion from C$17.36 billion, underscoring robust two-way capital flows.

The data highlight active cross-border investment as global markets stabilize and risk appetite improves. Historically, strong foreign inflows into Canadian bonds and equities are associated with a firmer loonie and improved liquidity in domestic markets. However, the rise in outward investment also reflects diversification amid moderate domestic yields.

Market impact: Slightly positive for CAD; net inflows support currency demand, though balanced by Canadians’ growing overseas exposure.

Canada’s housing starts surged to an annualized 279.2K units in September, well above expectations of 258K and up from 244.5K in August. The rise marks the strongest pace of new construction since early 2023, driven by multi-unit urban projects in major cities such as Toronto and Vancouver.

The rebound suggests that developers are accelerating projects amid easing materials costs and resilient demand, despite high mortgage rates and tighter lending conditions. Historically, housing starts above 270K signal robust construction momentum and contribute positively to quarterly GDP growth. Analysts note that sustained activity could help ease housing shortages but may also keep inflationary pressures elevated in the construction sector.

Market impact: Positive for CAD; strong housing data highlight economic resilience and may temper expectations for further Bank of Canada rate cuts.

Canada’s Manufacturing Sales fell 1.0% MoM in August, following a robust 2.2% gain in July, while Wholesale Sales also dropped 1.2%, after rising 1.7% the prior month. Both figures came in slightly better than expected but highlight a clear slowdown in goods demand amid weaker exports and inventory adjustments.

The declines were broad-based, led by machinery, fabricated metals, and food manufacturing, signaling cooling industrial momentum after summer strength. Historically, monthly sales contractions of around 1% often accompany soft external demand conditions and a stronger Canadian dollar. Economists note that the recent weakness reinforces the Bank of Canada’s cautious stance as growth moderates heading into Q4.

Market impact: Slightly negative for CAD and local equities; softer manufacturing and wholesale data suggest cooling activity and support expectations for a slower policy normalization path.

Canada’s Building Permits declined 1.2% MoM in August, extending July’s 1.1% drop and coming in below expectations of -0.7%. The continued contraction highlights weakness in residential construction, with new housing approvals falling amid high interest rates and affordability pressures.

This marks the third decline in the past four months, reflecting persistent softness in the housing sector despite strong population growth. Historically, permits have averaged modest monthly gains through 2023–24, but momentum has now clearly cooled. Economists warn that tight financial conditions and elevated material costs are weighing on developers’ confidence and could delay a broader construction recovery.

Market impact: Slightly negative for CAD; weaker housing data underscore the drag from restrictive monetary policy and reinforce expectations of slower economic growth in late 2025.

Canada’s employment surged by 60.4K jobs in September, far exceeding expectations of just 2.8K and reversing August’s –65.5K loss. The gains were driven by a robust 106.1K increase in full-time positions, partly offset by a 45.6K drop in part-time work.

The unemployment rate held steady at 7.1%, while the participation rate edged higher to 65.2%. Average hourly wages for permanent employees remained firm at +3.6% YoY, suggesting wage pressures are stabilizing.

Overall, the data signal a strong labor rebound but continued slack in the job market, balancing the Bank of Canada’s policy outlook between cautious optimism and inflation vigilance.

Market impact: Positive for the CAD; strong employment growth supports domestic demand and may reduce expectations for near-term rate cuts.

The Thomson Reuters/Ipsos Primary Consumer Sentiment Index (PCSI) for Canada edged up to 48.04 in October from 47.79 in September, signaling a modest rise in household confidence.

The improvement suggests Canadians are growing slightly more optimistic about financial conditions and job stability, though overall sentiment remains below the neutral 50 mark.

Market impact: Mildly positive for the CAD; steady sentiment supports consumption resilience, but lingering cost-of-living pressures keep optimism subdued.

Canada’s Ivey PMI jumped to 59.8 in September, well above 51.2 in August and 50.1 in July, while the non-seasonally adjusted index also surged to 61.6 from 50.0.

The sharp rebound points to renewed strength in business activity and purchasing, suggesting improving confidence across both public and private sectors.

Market impact: Positive for the CAD; robust PMI data support expectations of steady economic momentum and could reduce pressure on the Bank of Canada to ease policy soon.

Canada recorded a trade deficit of CAD 6.32 billion in August, widening from CAD 5.70 billion in July and sharply above June’s CAD 3.82 billion shortfall.

Exports fell to CAD 60.58 billion (from 62.46B), led by declines in energy and metals, while imports edged up to CAD 66.91 billion, driven by machinery and consumer goods.

The data highlight weakening external demand and a cooling export sector amid softer global growth.

Market impact: Negative for the CAD; widening trade imbalance weighs on Canada’s growth outlook and may reinforce expectations of a dovish Bank of Canada stance.

Canada’s Leading Economic Index rose 0.23% MoM in September, nearly unchanged from 0.24% in August, suggesting stable but modest forward momentum in economic activity.

The data point to a steady outlook, with growth supported by services and labor resilience but constrained by weak manufacturing and housing trends.

Market impact: Neutral for the CAD; steady indicators reinforce expectations of a soft-landing scenario and a patient Bank of Canada policy stance.

Canada’s services sector weakened further in September, with the S&P Global Services PMI dropping to 46.3 from 48.6 in August. The reading marks a sharper contraction in business activity, reflecting subdued demand and cautious spending.

Market impact: Negative for CAD, as persistent weakness in services raises concerns about Canada’s growth momentum heading into Q4.

Historical context: The index has remained below 50 for three straight months, highlighting sustained pressure on the economy’s largest sector.

Canada’s official reserve assets slipped to $126.6B in September, down from $127.9B the prior month. The modest decline reflects valuation changes and reduced holdings in foreign exchange assets.

Market impact: Neutral for CAD; reserves remain stable and provide ample external buffer.

Historical context: Canada’s reserves have hovered around $125–130B through 2024–2025, signaling steady management of external liquidity despite global volatility.