The unexpected ramping up of Middle East tensions took market attention away from the US Federal Reserve Board’s (Fed) policy meeting last week. This week, an EU-Canada summit is being held in Brussels, as well as a NATO summit in the Hague. Here are some other announcements to watch.

• The latest Purchasing Managers’ Index readings from Europe and Germany are available on Monday. In Europe, manufacturing activity in May contracted by the smallest margin since August 2022. Germany’s manufacturing contracted for the 35th consecutive month in May.
• The National Association of Realtors updates US home sales on Monday. Monthly sales declined by 0.5% in April to 4 million, the lowest in seven months. Inventory levels are around the highest in five years.
• Statistics Canada releases the core inflation rate for May on Tuesday. This rate, which excludes food, energy and mortgage interest costs, climbed to 2.5% in April from 2.2% in March.
• US economic growth for the first quarter will be released by the Bureau of Economic Analysis on Thursday. The preliminary reading indicated a contraction of 0.2% for the first quarter, the first contraction in three years.
• Canada’s gross domestic product will be announced on Friday. The economy grew by 0.1% in March and April. Mining activity grew while manufacturing declined.
• Key earnings in Canada include Alimentation Couche‑Tard. Key US earnings include FedEx, General Mills and Micron Technology.

Fed Governor Christopher Waller has said that the Fed could cut interest rates as early as July. Waller pointed out that while tariffs are a concern, the shock hasn’t been as large as anticipated yet. The US administration is keen for cuts, partly to help relieve government debt, but the Fed reiterated that reducing borrowing costs for the government was not part of its mandate.

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.