North American central banks will make their interest rate announcements this week. The Bank of Canada (BoC) and US Federal Reserve Board (Fed) both loosened monetary policy in 2025, seeking to support their respective economies. Financial markets are likely to be driven by expectations and the actual decisions of these two central banks this week. Investors will continue to pay attention to developments in geopolitics, where tensions have heightened in recent weeks.

• The BoC will make its interest rate announcement on Wednesday. At its December meeting, the BoC kept its policy interest rate unchanged at 2.25%, believing it remains accomodative and will help support Canada’s labour market and economy, while keeping inflation contained.
• Canada’s trade balance and gross domestic product in November will be announced on Thursday and Friday, respectively. In October, Canada’s economy shrank by 0.3% but Statistics Canada estimated a 0.1% increase in November.
• The Fed will announce its interest rate decision on Wednesday. The US central bank lowered the target range of its federal funds rate by 25 basis points to 3.50%–3.75% at its December meeting. Fed officials are divided on inflation and the path of interest rates.
• Around the world, China’s industrial profits will be released tonight, India’s industrial production on Wednesday, European consumer confidence on Thursday and Europe’s fourth-quarter 2025 economic growth reading on Friday.
• Notable earnings in Canada include Metro, Rogers Communications, Imperial Oil, Algoma Steel and CN Railway. Key earnings in the US include UnitedHealth, Boeing, Tesla, Meta Platforms, Microsoft, Mastercard, Apple, Visa, Chevron and Exxon Mobil.

Between central bank announcements and several notable corporate earnings announcements, investors will have a lot of information to digest to get a read on corporate and economic strength. Canada’s economic activity has been relatively stable, but trade uncertainty lingers. Last week, the US Commerce Secretary said that renegotiations of the Canada-United States-Mexico Agreement may begin this summer.

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.