The end of August turned out to be eventful after trade negotiations between Canada and the US fell apart, which resulted in the US imposing tariffs on Canada, and Canada saying it will also impose new tariffs on the US beginning on September 8. This week will have several key economic announcements in Canada, which will garner attention from the investor community. Here’s what to watch for this week.

• The Bank of Canada (BoC) will make its interest rate decision on Wednesday. The BoC has kept its benchmark overnight interest rate at 2.25% at six straight meetings. The BoC is balancing several factors for its decision, including elevated inflation and economic uncertainty amid trade tensions.
• Canada’s labour market data for August will be released this Friday. In July, Canada’s economy added 75,100 jobs, which helped push the unemployment rate down to 6.4%, which is its lowest level since 2024.
• In the US, the labour market will be in the spotlight when ADP announces its employment change on Wednesday, while the headline jobs report will be released on Friday. The US job market has lost some momentum in recent months.
• Elsewhere, European inflation will be announced on Tuesday, China’s business activity on Wednesday, European services sector activity on Thursday and European retail sales on Friday.
• Notable earnings in Canada include Alimentation Couche-Tard and Lululemon. Key earnings in the US include Five Below and Broadcom.

Last Friday, Statistics Canada reported that Canada’s economy expanded at a relatively strong pace in the second quarter of 2026, alleviating some uncertainty about the health of Canada’s economy. The BoC is embarking on a difficult decision with elevated inflation and solid economic activity but an unclear view on how heightened trade tensions will impact Canada’s economy over the third and fourth quarters of 2026.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.