Investors enter the week with the conflict in the Middle East persisting and inflationary pressures building on both sides of the Canada-US border. After the Bank of Canada (BoC) held its policy interest rate steady and the European Central Bank raised its deposit rate last week, attention now shifts to the US Federal Reserve Board’s (Fed’s) interest-rate announcement midweek. Here in Canada, fresh readings on housing activity and consumer spending will offer clues on how households are coping with higher prices.

• The Canadian Real Estate Association will announce Canada’s existing home sales for May on Tuesday. Home sales rose by 0.7% in April, its first increase in 2026, which helped give the spring selling season a positive start.
• On Friday, Canadian retail sales for April will be released. In March, retail sales increased, but it was mostly due to higher gasoline prices. Excluding gasoline, sales declined over the month.
• The Fed will make its interest-rate announcement on Wednesday. The Fed has kept the target range of its federal funds rate steady at 3.50%–3.75% at three straight meetings. The central bank has much to factor into its decision, including rising inflation and slowing economic growth.
• Looking globally, China’s industrial production and retail sales will be released today. The eurozone’s balance of trade data will also be released today and consumer prices Wednesday. The Bank of Japan announces its interest rate decision on Tuesday.
• There will only be a few corporate earnings announcements in Canada and the US this week.

The Fed faces a difficult balancing act, weighing rising inflation against signs of slowing economic growth, much like the BoC did last week when it left its policy interest rate unchanged. Markets will be listening closely to the Fed’s tone for hints about where rates could go next. Closer to home, Canada’s home sales and retail sales reports will help show whether consumers are holding up under the pressure of higher energy prices. Together, this week’s announcements should paint a clearer picture of where the North American economy is headed this summer.

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