Last week, there were plenty of economic announcements and plans for new alliances that had markets moving. The US Federal Reserve Board raised interest rates for the first time in three years, while Canada and the European Union (EU) spoke about an enhanced alliance amid a shifting global economic and policy environment. In Canada, markets will listen for any updates about Canada-EU relations, while the critical retail sales report will be released this week, which will give some guidance on the strength of Canadian households. Here’s what to watch for this week.

• Statistics Canada (StatsCan) will release Canada’s retail sales report for July on Thursday. Retail sales rose by 0.6% in June, which was its sixth consecutive increase. Early data shows the momentum may have slowed in July, with StatsCan estimating retail sales dropped by 0.8%.
• South of the border, a final reading of US consumer confidence will be announced on Friday. The preliminary reading showed a steep decline in September in response to concerns over household budgets and business conditions.
• European services sector activity will be released on Wednesday, Japan’s manufacturing activity on Wednesday night and Mexico’s unemployment rate on Friday.
• US President Donald Trump and Chinese President Xi Jinping are holding a summit this Thursday. The two are expected to discuss technology and critical minerals, among other key issues between the world’s two largest economies.

While short on scheduled economic announcements, policy and politics will play a key role in the direction of financial markets this week. Canadian Prime Minister Mark Carney said parliament must now debate and vote on enhancing its relationship with the EU. As those debates eventually take place, we may learn more about what the potential alliance could mean for Canadian households and businesses.

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.