EconoTicker

• S&P Global Manufacturing PMI (Sep): 47.7 (prior 48.3).

Market impact: Negative for CAD, as the deeper contraction underscores persistent weakness in Canada’s manufacturing sector.

Historical context: The index has remained below the 50 threshold for seven straight months, highlighting ongoing pressure from weak demand and high borrowing costs.

• Budget Balance (Jul): -C$1.51B (vs. +C$3.63B prior)
• Budget Balance (YoY, Jul): -C$7.79B (vs. -C$3.34B prior)

Market impact: Negative for CAD, as the wider shortfall highlights fiscal pressures amid slower revenue growth and higher spending.

Historical context: July’s deficit was the largest in four months, pushing the year-to-date fiscal gap deeper and raising concerns over the sustainability of Canada’s budget outlook.

• GDP (MoM, Jul): +0.2% (vs. +0.1% expected, -0.1% prior)
• Wholesale Sales (MoM, Aug): -1.3% (vs. +1.2% prior)
• GDP (MoM, Aug): 0.0% (vs. +0.2% prior)

Market impact: Slightly negative for CAD, as the rebound in July was offset by stagnation in August and weaker wholesale activity, pointing to sluggish Q3 momentum.

Historical context: After contracting in June, GDP rose in July on manufacturing and services gains, but preliminary August data showed flat output, suggesting Canada’s economy remains fragile under high interest rates.

• Average Weekly Earnings (YoY, Jul): +3.31% (vs. +3.59% prior)

Market impact: Slightly negative for CAD, as softer wage growth may ease inflationary pressures and reduce the case for tighter monetary policy.

Historical context: July marked the slowest pace of wage growth in five months, suggesting cooling labor cost pressures amid signs of a moderating job market.

• New Housing Price Index (MoM, Aug): -0.3% (vs. 0.0% prior, -0.1% expected)

Market impact: Negative for CAD, as falling housing prices reflect weakness in the real estate sector and may dampen construction activity.

Historical context: August marked the sharpest monthly decline in over a year, underscoring continued headwinds from high interest rates and affordability pressures.

• Industrial Product Price Index (MoM, Aug): +0.5% (vs. +0.2% prior, +0.7% expected)
• Industrial Product Price Index (YoY, Aug): +4.0% (vs. +2.6% prior)
• Raw Materials Price Index (MoM, Aug): -0.6% (vs. +1.2% prior, +0.3% expected)
• Raw Materials Price Index (YoY, Aug): +3.2% (vs. +0.7% prior)

Market impact: Mixed for CAD, as higher producer prices point to stronger inflationary pressures, but falling raw material costs suggest easing input inflation ahead.

Historical context: August marked the fastest annual rise in producer prices since early 2023, while raw materials reversed course after recent gains, reflecting volatile energy and commodity markets.

• Core Retail Sales (MoM, Jul): -1.2% (vs. -0.4% prior, +2.2% expected)
• Retail Sales (MoM, Jul): -0.8% (vs. -0.8% prior, +1.6% expected)
• Retail Sales (MoM, Aug, flash): +1.0% (vs. -0.8% prior)

Market impact: Mixed for CAD — July’s weakness highlights fragile consumer demand, but the August rebound flash estimate offers some relief for growth momentum.

Historical context: Retail activity remains volatile, with July marking the sharpest core sales drop in nearly a year, followed by signs of stabilization in August.

• Foreign Securities Purchases (Jul): C$26.69B (vs. -C$1.32B prior, C$1.01B expected)
• Foreign Securities Purchases by Canadians (Jul): C$17.41B (vs. C$9.04B prior)

Market impact: Supportive for CAD, as large net foreign inflows highlight renewed international demand for Canadian assets, though increased outbound investment by Canadians balances the picture.

Historical context: July marked the strongest monthly foreign inflows since early 2022, reversing the net outflows seen in June.

• CPI (YoY, Aug): +1.9% (vs. +2.0% prior, +1.7% expected)
• CPI (MoM, Aug): -0.1% (vs. 0.0% prior, +0.3% expected)
• Core CPI (YoY, Aug): +2.6% (unchanged)
• Core CPI (MoM, Aug): 0.0% (vs. +0.1% prior)
• Common CPI (YoY, Aug): +2.5% (unchanged)
• Median CPI (YoY, Aug): +3.1% (unchanged)
• Trimmed CPI (YoY, Aug): +3.0% (vs. +3.1% prior)

Market impact: Slightly negative for CAD, as headline CPI slipped below 2% and core inflation measures showed stability, easing pressure on the Bank of Canada to tighten further.

Historical context: This marks the first time since early 2023 that headline inflation has dipped below 2%, highlighting disinflation momentum even as core measures remain above target.

• Housing Starts (Aug): 245.8K (vs. 278.0K prior, 293.5K expected), marking a sharp slowdown in new residential construction.

Market impact: Negative for CAD, as weaker housing activity signals cooling momentum in Canada’s property market and broader economy.

Historical context: This is the lowest level of housing starts since mid-2023, reflecting higher borrowing costs and affordability pressures weighing on construction demand.

• Manufacturing Sales (MoM, Jul): +2.5% (vs. +1.7% prior, +0.3% expected)
• New Motor Vehicle Sales (Jul): 179.8K (vs. 177.2K prior)
• Wholesale Sales (MoM, Jul): +1.2% (vs. +1.4% prior, +1.0% expected)

Market impact: Supportive for CAD, as stronger manufacturing and wholesale activity suggest resilient domestic demand and industrial output.

Historical context: July marks the fastest manufacturing sales growth in nearly a year, with auto sales and wholesale trade also holding firm, reinforcing Canada’s mid-year economic rebound.

• Building Permits (MoM, Jul): -0.1%, below expectations (+3.7%) but far better than June’s sharp -9.0% drop, suggesting stabilization.
• Capacity Utilization Rate (Q2): 79.3%, slightly above forecasts (78.8%) though lower than Q1’s 79.9%, reflecting steady industrial activity.

Market impact: Neutral for CAD, as stable capacity use offsets weakness in permits, pointing to mixed signals in the construction and industrial sectors.

Historical context: Building permits remain volatile after large swings in H1 2025, while utilization has hovered near 79–80% for two years, showing consistent though capped industrial performance.