The Bank of Canada (BoC) will headline economic stories out of Canada this week. Markets will closely monitor statements from the BoC on the expected path of inflation and the economy, and what they might mean for monetary policy. There are also several critical economic announcements in the US, which will give insight into the health of the that country’s economy. Markets’ attention will also be on the Middle East, where US-Iran tensions reemerged last week, putting peace negotiations into question. Here’s what to watch for this week.

• The BoC will announce its interest rate decision on Wednesday. The BoC’s benchmark overnight interest rate currently stands at 2.25% after five consecutive rate holds. Markets will closely monitor statements from BoC officials to try to predict the future path of interest rates.
• Also on Wednesday, the Canadian Real Estate Association will announce Canada’s existing home sales in June. Home sales rose by 5.5% in May.
• The US inflation rate in June will be released on Tuesday. The annual inflation rate in the US climbed to 4.2% in May, which was its highest level since 2023, amid energy price pressures from the conflict in the Middle East.
• Looking elsewhere, China’s retail sales and industrial production will be released on Tuesday, UK economic growth on Thursday and Europe’s inflation rate on Friday.
• Notable earnings in Canada include Cogeco and Uranium Royalty. Key earnings in the US include Netflix and Alcoa, along with those from several large financial institutions.

There’s plenty for investors to monitor that’ll surely help drive the performance of global financial markets over the week. The BoC’s interest rate decision in Canada is particularly notable. It seems unlikely the BoC will raise interest rates after noting at its last meeting that inflationary pressures seem contained to energy products. South of the border, June’s inflation data will help drive the next interest rate decision of the US Federal Reserve Board.

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