Weekly Market Preview
Friday, 20 June 2025
Markets are closely watching a series of key economic data releases this week. Among the most anticipated is Canada’s Consumer Price Index report for May. Bloomberg forecasts suggest the YoY inflation may rise slightly from 2.5% in April to 2.6% in May. The Bank of Canada kept its benchmark interest rate unchanged at 2.75% at its most recent meeting, the second consecutive pause following a series of cuts that began in mid-June last year. This decision was influenced by stronger-than-expected economic growth (with GDP rising from 2.1% in Q4 2023 to 2.2% in Q1 2024) and optimism around a potential trade agreement with the United States.
If inflation comes in higher than expected, the Bank of Canada may maintain its current interest rate stance. Conversely, a weaker inflation reading, especially against the backdrop of rising unemployment, which reached 7% in May (the highest in nearly four years), could reopen the door to further rate cuts.
Investors are also awaiting the May release of the US Personal Consumption Expenditures index (the Federal Reserve’s preferred inflation gauge). Bloomberg expects the annual PCE to rise slightly from 2.1% in April to 2.2% in May. The Fed held rates steady at 4.50% in its latest meeting and maintained its projections for the number of rates cuts this year, drawing little market reaction. However, a softer-than-expected PCE reading could shift sentiment within the Federal Open Market Committee, increasing the likelihood of a more aggressive rate cut (potentially up to 50 basis points) in September.
Monday, 23rd of June
Tuesday, 24th of June
Wednesday, 25th of June
Thursday, 26th of June
Friday, 27th of June