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Canada’s Industrial Product Price Index (IPPI) rose 0.7% month-on-month in July (versus 0.3% expected), taking the annual pace to 2.6% YoY — a clear rebound in finished-goods inflation. By contrast, the Raw Materials Price Index (RMPI) rose only 0.3% m/m after a prior large gain and slowed on the year to 0.8% YoY. The divergence suggests firms are either passing earlier input costs through to selling prices or enjoying margin expansion as upstream pressures moderate. Overall, the data point to firmer producer-level price momentum even as commodity/input inflation cools, producing a mixed signal for downstream consumer inflation.

What it is (short):

IPPI measures prices received by Canadian producers for finished goods; RMPI tracks prices of raw inputs — together they show pipeline inflation.

Possible effect:

A stronger IPPI can feed into CPI over time and be mildly hawkish for rates, while a softer RMPI tempers that risk. Expect a mixed market reaction: modest support to yields and the loonie if pass-through persists, but policymakers will look for persistence before shifting bias.

Canada’s New Housing Price Index eased 0.1% month-on-month in July, below the +0.1% consensus but an improvement from June’s -0.2% decline. The small dip suggests price pressures in the new-build segment have softened after earlier volatility, with builders likely competing on incentives and timing of completions weighing on headline readings. While the move is modest, it adds to evidence that housing costs are cooling in parts of the market even as resale dynamics and financing conditions remain uneven. Watch permits, starts and resale prices to judge whether this is a temporary wobble or the start of a broader easing in housing inflation.

What it is (short):

The New Housing Price Index tracks month-to-month price changes for newly built homes — a timely read on construction pricing and supply pressures.

Possible effect:

A softer new-home price print can slightly reduce inflationary pressure from the housing sector, modestly ease BoC’s near-term tightening bias, and weigh on Canadian dollar and homebuilder stocks if the trend persists.

Canada’s headline CPI rose 0.3% month-on-month in July and 1.7% year-on-year, while the Bank of Canada’s preferred Common/Core CPI printed 2.6% YoY. Core monthly inflation cooled to 0.1%, below some forecasts, even as distributional measures remained a touch higher — Median CPI 3.1% YoY and Trimmed CPI 3.0% YoY. The data point to modest price gains overall but lingering underlying inflation in parts of the basket, driven by services and shelter components rather than goods.

What it is: CPI measures consumer price changes; core/common/median/trimmed variants strip volatile items to show underlying inflation trends.

Possible effect: The mix supports a cautious Bank of Canada — headline softness eases immediate pressure for hikes, but persistent core readings likely keep policymakers patient on cuts; the loonie may trade rangebound.

Canada’s manufacturing sales rose 0.3% m/m in June, a touch below the 0.4% consensus but an improvement on May’s –1.5% drop. The modest rebound suggests factory shipments stabilized into summer, even as rate-sensitive sectors stayed cautious. New motor vehicle sales fell to 177.3K units from 194.5K, pointing to softer showroom traffic and moderating demand after earlier strength. The mixed picture—firmer factory values but weaker unit auto sales—keeps the growth outlook steady rather than strong.

What it is:

Manufacturing sales track the dollar value of goods shipped by factories; new motor vehicle sales count units sold by dealers.

Possible effect:

A small manufacturing gain is marginally supportive for near-term GDP, but softer autos could cap July retail momentum. The Bank of Canada can stay patient; CAD impact likely mixed.

Canada’s Thomson Reuters/Ipsos Primary Consumer Sentiment Index (PCSI) eased to 47.70 in August from 48.07 in July, signaling slightly softer household confidence. The small pullback points to lingering caution around borrowing costs and the economic outlook, even as inflation pressures moderate. Sub-components suggest consumers remain wary about big-ticket purchases and the jobs outlook, keeping overall sentiment just below the neutral 50 mark.

What it is:

The PCSI is a monthly composite of views on current conditions, personal finances, investment climate, and employment; readings closer to 100 indicate stronger confidence.

Possible effect:

Softer sentiment may temper retail spending and services demand into early Q4, nudging firms to stay cautious on hiring. Markets could read the print as slightly growth-negative, reinforcing a wait-and-see stance on Bank of Canada policy and limiting near-term upside for the Canadian dollar.

Canada lost 40,800 jobs in July—well below the 15,300 forecast—with full-time positions down 51,000 and part-time up only 10,300, pushing the unemployment rate to 6.9% (versus 7.0% expected). The participation rate dipped to 65.2% from 65.4%. However, average hourly wages for permanent employees rose 3.5% year-on-year, outpacing the 3.2% forecast.

What it is: Employment Change tracks net job gains or losses; the participation and unemployment rates measure labour-market engagement and slack; wage growth reflects cost pressures on employers.

Possible effect: Slowing hiring and rising wages may prompt the Bank of Canada to pause rate cuts as it balances growth against inflation, while households could face tighter budgets amid weaker job prospects.

Canada’s services PMI rose to 49.3 in July, up from 44.3 in June and above expectations, narrowing the gap to the 50-point expansion threshold. While still in contraction territory, the jump reflects a pickup in new client engagements and stabilizing demand for financial, professional and transport services. Firms reported modest improvements in staffing and backlogs, as well as controlled input costs. The services PMI, compiled from surveys of purchasing managers, gauges sector health; readings below 50 signal contraction. July’s uptick suggests the worst of the slowdown may be over, which could support renewed hiring and consumer spending, and inform the Bank of Canada’s deliberations on interest rates as it balances growth against inflation risks.

Canada’s goods trade deficit widened slightly in June to C$5.86 billion, up from C$5.49 billion in May and above the C$5.80 billion forecast. Exports rose to C$61.74 billion, buoyed by higher commodity and energy shipments, while imports climbed to C$67.60 billion, driven by stronger machinery, electronics and consumer goods purchases. The trade balance—exports minus imports—is a key GDP component; the wider deficit will subtract more from second-quarter growth estimates. A higher import bill may also weigh on the Canadian dollar, though robust export volumes provide some offset. Policymakers at the Bank of Canada will watch incoming trade data for signs of economic resilience, but the modest widening boost caution around near-term output and currency pressures.

Canada’s gross domestic product rose 0.1% month-on-month in June, reversing a 0.1% decline in May. The rebound was driven by stronger performance in services—particularly finance and wholesale trade—and a recovery in natural resources output, while manufacturing continued to contract modestly. Household spending remained resilient, and export volumes ticked higher amid steady global demand. After two consecutive months of stagnation and slight contraction, June’s uptick suggests the economy is avoiding a deeper slowdown. Policymakers at the Bank of Canada will view this as confirmation that growth is moderating but still on a stable footing, likely supporting their decision to hold interest rates steady while monitoring incoming data for signs of both domestic and external headwinds.

KEY FIGURES

• BoC Policy Rate: 2.75% (est: 2.75%; prev: 2.75%)

WHAT IT MEANS

The Bank of Canada maintained its policy rate, indicating that current monetary settings remain appropriate amid moderating inflation and mixed economic signals.

MARKET REACTION

The Canadian dollar was little changed against the US dollar, and Government of Canada bond yields stayed near recent levels as markets balanced rate-hold expectations.

OUTLOOK

Investors will watch upcoming CPI and retail sales reports, along with BoC Governor remarks, for clues on the timing of the next rate adjustment.

KEY FIGURES

• Core Retail Sales MoM (May): -0.2% (est: -0.2%; prev: -0.3%)

• Manufacturing Sales MoM (Jun): 0.4% (prev: -0.9%)

• Retail Sales MoM (May): -1.1% (est: -1.1%; prev: 0.4%)

• Retail Sales MoM (Jun): 1.6% (prev: -1.1%)

WHAT IT MEANS

After a sharp 1.1% drop in May, overall retail sales rebounded strongly by 1.6% in June, led by a modest 0.4% gain in manufacturing output; however, core retail sales were flat, suggesting uneven consumer spending across sectors.

MARKET REACTION

The Canadian dollar edged higher against the US dollar on the stronger June sales figures, while TSX Composite futures ticked up modestly.

OUTLOOK

Market participants will watch next week’s Bank of Canada policy decision and upcoming GDP data for further signals on whether consumer momentum can be sustained.

Canada’s New Housing Price Index (NHPI) declined by 0.2% month-over-month in June, matching May’s drop and missing expectations of flat growth (0.0%).

📉 What it Means:

The back-to-back decline signals ongoing weakness in Canada’s housing market, likely influenced by high borrowing costs and cautious buyer sentiment.