Economic announcements this week will be considered against a backdrop of tariff letters from the US administration that have been sent out to trading partners, including Canada. US President Donald Trump has suggested that the 35% tariff rate is partially to incentivize Canada to help stop the flow of fentanyl. Many announcements will focus on inflation this week.

• Statistics Canada will release Canada’s core inflation data for June on Tuesday. In May, inflation remained unchanged at 2.5%, compared to the previous month. Monthly inflation data will also be released.
• South of the border, the US Bureau of Labor Statistics will release its core inflation data for June on Tuesday. Consumer prices rose by 2.8% in March, April and May. The US Federal Reserve Board will be paying attention and has guided for 50 basis points of rate cuts in 2025.
• Moving to announcements from abroad, China’s gross domestic product growth for the second quarter of 2025 is released today, as is Japan’s industrial production data. In an interesting week for inflation data, the UK will also report price trends for June on Wednesday.
• Canada’s CFIB Business Barometer long-term index will be released on Thursday by the Canadian Federation of Independent Business. The expectations of small businesses picked up to 47.3 in June from 40 in May.

Trade talks between Canada and the US ran into difficulties when Canada imposed the digital services tax. Talks resumed after the tax was lifted. Markets are still waiting to see what the impact of evolving tariffs will be on inflationary pressure, and so this week’s data could be useful to assess how much of the cost is being passed down to consumers from businesses. The US administration has indicated that it is considering a “blanket” level of tariffs between 15% and 20% on trading partners.

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