Economic Indicators (Source: Scotiabank)
Is the BoC Blowing Smoke on Inflation Risk?
Jul 15, 2026
The Bank of Canada held its policy rate unchanged at 2.25% to the surprise of absolutely no one. Also unsurprising was the overall tone of the communications that just kept a steady hand on the tiller, tweaked a few forecasts and words here and there, and stayed on the sidelines monitoring developments and data. The press conference ended with wishes for a happy summer as the BoC goes on vacation which are the customary words often associated with a July presser since the next decision only arrives at the end of summer.
Markets reacted by shrugging as they placed more attention on US developments and largely ignored the BoC. Canada’s 2-year yield is down 4bps on the day versus down 5bps in the US. Canada’s curve reacted in sympathy to the US after weak US producer prices and lower revisions which dragged September Fed hike pricing down by 4–5bps on continued advice to receive September Fed OIS even as it has moved from pricing a full Fed hike at the peak to about half of one now. USDCAD is essentially unchanged. Markets continue to price about 18bps of a 25ps BoC rate hike by year-end which is where they stood going into the decision this morning.
All of that is not the same as saying that ....     More >>

Featured Insights (Source: RBC Financial Group)
Navigating the CUSMA Joint Review: Where we go from here
Jul 2, 2026
CUSMA has served as a critical backstop for Canada-U.S. trade amid the U.S. administration’s aggressive tariff stance. Product-specific measures (steel, aluminum, autos, lumber, etc.) have hurt Canada’s economy, but about 90% of U.S. imports from Canada have remained duty free largely thanks to CUSMA.
The pre-scheduled joint review of the agreement has drawn substantial attention, because of its significance. However, an important distinction is that while no agreement was reached on July 1 to extend CUSMA, the deal doesn’t expire until 2036, and tariff rates don’t change as a result.
Indeed, the renewal process built into CUSMA anticipated that extending the agreement could be politically challenging. Therefore, it requires all three parties to begin negotiating a decade before its 2036 expiry—a process that formally begins now.
Non-renewal isn’t a termination
Near-term trade risks for Canada haven’t gone away. Article 34.6 of CUSMA still allows any country to leave the agreement with six months’ written notice.
But, we continue to view the outright termination of CUSMA as unlikely if economic reasoning holds. Decades of free trade ....     More >>

TD - The Weekly Bottom Line - Jul 17, 2026
Canadian Highlights
- The Bank of Canada left rates unchanged at 2.25% but struck a more constructive tone on the near-term economic outlook, projecting a sharp rebound in Q2 growth.
- Inflation remains the key source of uncertainty, though the removal of references to potential “consecutive” rate hikes suggests policymakers are growing more comfortable that energy-led price pressures are not spreading broadly.
- This week’s data broadly supported the Bank’s outlook, with strength in manufacturing, wholesale trade, and home sales pointing to an economy that is gradually regaining traction.
U.S. Highlights
- Tensions in the Middle East continued to escalate this week, pushing WTI prices back above $80 per-barrel.
- Inflation pressures cooled more than expected in June. Though the recent U-turn in oil prices raises concerns over the durability of the disinflationary dynamics.
- Retail sales remained decently strong in June, suggesting consumer spending regained some momentum in Q2 after stalling in Q1.