Last week ended on a good note as it was announced that Canada and China will build a strategic relationship, signing several agreements to increase investment and trade between the two countries. This includes trade and investment in energy products, along with lower tariffs on Chinese-made electric vehicles and expectations for China to reduce tariffs on Canadian rapeseed. The announcement was welcome news for the Canadian economy, which has seen trade disruptions with the US, its largest trade partner. Looking ahead, here’s some key economic announcements to watch for this week.

• Canada’s inflation rate in December will be announced today. The annual inflation rate held steady at 2.2% in November. Inflation has remained close to the Bank of Canada’s (BoC) 2% target during 2025, suggesting Canada’s central bank has inflation largely contained.
• Retail sales in Canada will be released on Friday. Retail sales declined by 0.2% in October. This will give us a glimpse into the spending strength of Canadian consumers.
• In the US, the personal consumption expenditure price index, which is the US Federal Reserve Board’s preferred inflation gauge, will be released on Thursday. The final reading of third-quarter 2025 growth will also be announced on Thursday.
• Elsewhere, the UK inflation rate will be released on Wednesday, Japan’s trade balance on Wednesday night and the Bank of Japan’s interest rate decision on Thursday night.
• Notable earnings in Canada include Dye & Durham, Canadian Goldfields and Novagold Resources. Key earnings in the US include 3M, Netflix, Kinder Morgan, GE and Intel.

Canada’s trade truce with China may raise optimism for the Canadian economy and put the Canadian federal government closer to its goal of doubling non-US exports in the next four years. There will be some key economic announcements this week that will help drive markets and set the stage for the BoC’s interest rate announcement on January 28.

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.