Last week, we heard from major central banks, all of which expressed concerns about inflationary pressures building in response to the conflict in the Middle East. This raised concern among investors that interest rates could move higher by year-end. However, the central banks will need to tread carefully amid higher prices against a potential slowdown in economic activity. The conflict remains ongoing, putting upward pressure on energy prices. Financial markets could continue to see some choppiness amid economic, price and policy uncertainty. While all eyes will be on the developments in the Middle East, there will be a few critical economic announcements to monitor.

• It’s a light schedule for economic announcements out of Canada this week. On Thursday, the Survey of Employment, Payrolls and Hours for January will be released. The survey showed Canada’s economy lost jobs in January.
• South of the border, import and export prices will be released on Wednesday. The final reading of consumer confidence from the University of Michigan will be announced on Friday.
• Looking abroad, European consumer confidence will be announced today, European services sector activity on Tuesday, UK inflation rate on Wednesday and Mexico’s trade balance on Friday.
• Key earnings in Canada include goeasy, Dollarama and MEG Energy. Notable earnings in the US include GameStop and Cintas.

The conflict in the Middle East has been ongoing for three weeks. There is no clear time frame for when it may come to an end. Higher energy prices are causing concern for the global economy, which prompted several countries, including Canada, to signal their willingness to help stabilize the energy market and take “appropriate efforts” to help tankers safely pass through the Strait of Hormuz.

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.