Canada will see several critical economic announcements this week, including the Bank of Canada’s (BoC) second interest rate decision of 2026. Investors will carefully monitor how the BoC sees the conflict in the Middle East impacting Canada’s economy and inflation. Last week, the US and Israel’s war on Iran persisted, keeping the Strait of Hormuz effectively closed, which kept oil prices elevated. Efforts by the International Energy Agency to release emergency reserves to the market did little to bring down oil prices. Investors’ attention will be squarely on the conflict and its impact on financial markets and the global economy.

• Canada’s inflation rate in February will be released today. The annual inflation rate was 2.3% in January, up slightly from December. Core measures of inflation softened in January.
• The BoC will make its interest rate decision on Wednesday. The BoC held its benchmark overnight interest rate steady at 2.25% at its last meeting.
• The US Federal Reserve Board (Fed) will also announce its interest rate decision on Wednesday. Per a Bloomberg survey of economists, the Fed is expected to hold its federal funds rate steady at a target range of 3.50%–3.75% given rising inflationary concerns.
• Around the world, Europe’s inflation rate will be announced on Wednesday, and the Bank of Japan, Bank of England and European Central Bank make their interest rate decisions over Wednesday and Thursday.
• Notable earnings in Canada include Lululemon, Alimentation Couche-Tard and NuVista Energy. Key earnings in the US include General Mills, Micron Technology and FedEx.

It will be a busy week for central banks, which will make their second interest rate decisions of 2026. The geopolitical and economic landscape has changed significantly since their first interest rate decisions, which will have investors from around the globe paying close attention to their outlook for their respective economies. The outlook is likely to be clouded by higher energy prices and the potential for inflation to move higher.

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.