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Canada’s annual inflation rate was 2.2 per cent in November, unchanged from the previous month, driven primarily by an increase in food prices which rose at their fastest pace in more than two years, Statistics Canada said on Monday.

A year-on-year drop in the costs of gasoline and shelter partially offset the rise in food prices, the statistics agency said.

It was the first month since March that core measures of inflation, which strip out volatile items, came in below 3 per cent, the upper end of the Bank of Canada’s control range.

Analysts polled by Reuters had forecast annual inflation of 2.3 per cent.

November’s monthly inflation matched analysts’ estimates of 0.1 per cent, down from 0.2 per cent in October, Statscan said.

Canada’s annual inflation has been subdued since April due to the removal of a carbon levy on the sale of gasoline. This has kept the price of the fuel low on a year-on-year basis, helping contain overall inflation.

Statscan’s data showed that the price of gasoline was up 1.8 per cent in November when compared with October, but on an annual basis it was 7.8-per-cent lower.

Without the effect of gasoline, November’s CPI was 2.6 per cent.

Food prices continued to rise, with economists pointing to them as one of the most significant drivers of inflation, which has proven sticky despite big cuts in interest rates by the central bank.

Food prices overall rose by 4.2 per cent on a yearly basis in November, the biggest increase since December 2023, spurred by a 4.7-per-cent rise in grocery prices and a 3.3-per-cent increase in the cost of food purchased from restaurants, Statscan said.

Average family of four will spend $994 more on food next year, report projects

Adverse weather conditions in growing regions and President Donald Trump’s import tariffs are considered to be driving up food prices, Statscan said.

The Bank of Canada’s preferred measures of core inflation – CPI-median and CPI-trim – had hovered around 3 per cent since April when Trump’s tariffs started to take effect.

CPI-median, the centermost component of the CPI basket, edged down to 2.8 per cent in November from 3 per cent in the prior month. CPI-trim, which excludes the most extreme price changes, was also at 2.8 per cent last month from 3 per cent in October.

The Canadian dollar firmed slightly after the data, trading up 0.07 per cent to 1.3761 to the U.S. dollar, or 72.67 U.S. cents. Yields on Canada’s two-year government bonds were down 2.3 basis points at 2.486 per cent.

Monday December 15

China retail sales, industrial production and fixed asset investment

Euro zone industrial production

(5 a.m. ET) Canada’s existing home sales and average prices for November. Estimates are year-over-year declines of 11.0 per cent and 2.5 per cent, respectively.

(5 a.m. ET) Canada’s MLS Home Price Index for November. Estimate is a year-over-year drop of 3.5 per cent.

(8:15 a.m. ET) Canadian housing starts for November. Estimate is an annualized rate rise of 11.7 per cent.

(8:30 a.m. ET) Canadian CPI for November. The Street expects gains of 0.1 per cent from October and 2.3 per cent year-over-year.

(8:30 a.m. ET) Canada’s manufacturing sales and new orders for October. Estimates are month-over-month declines of 1.1 per cent and 1.5 per cent, respectively.

(8:30 a.m. ET) U.S. Empire State Manufacturing Survey for December.

(10 a.m. ET) U.S. NAHB Housing Market Index for December.

Earnings include: Mainstreet Equity Corp.

–

Tuesday December 16

China PMI

Euro zone PMI and trade surplus

(8:30 a.m. ET) U.S. nonfarm payrolls for November. The Street expects an increase of 50,000 from October with the unemployment rate rising 0.1 per cent from the last reading of 4.4 per cent in September and average hourly wages up 3.6 per cent year-over-year. The data from October will also be released following the government shutdown.

(8:30 a.m. ET) U.S. retail sales for October. Consensus is a rise of 0.2 per cent month-over-month.

(8:30 a.m. ET) U.S. housing starts for November.

(8:20 a.m. ET) U.S. building permits for November.

(9:45 a.m. ET) U.S. S&P Global PMIs for December.

(10 a.m. ET) U.S. business inventories for September.

(12:45 p.m. ET) Bank of Canada Governor Tiff Macklem speaks in Montreal (with press conference to follow)

Earnings include: Lennar Corp.; OrganiGram Holdings Inc.

–

Wednesday December 17

Japan trade balance and core machine orders

Euro zone CPI and labour costs

Germany business sentiment

(8:30 a.m. ET) Canada’s international securities transactions for October.

Earnings include: Asante Gold Corp.; General Mills Inc.; Micron Technology Inc.; Transat AT Inc.

–

Thursday December 18

Bank of Japan monetary policy meeting (through Friday)

Bank of England monetary policy meeting

ECB monetary policy meeting

(7 a.m. ET) Canada’s CFIB Business Barometer for December.

(8:30 a.m. ET) Canada’s job vacancy rate for October.

(8:30 a.m. ET) U.S. CPI for November. The Street expects a rise of 0.3 per cent from October and up 3.1 per cent year-over-year.

(8:30 a.m. ET) U.S. initial jobless claims for week of Dec. 13. Estimate is 225,000, down 11,000 from the previous week.

(8:30 a.m. ET) U.S. Philadelphia Fed Index for December.

(8:30 a.m. ET) U.S. current account deficit for Q3.

(10 a.m. ET) U.S. leading indicator for November.

Earnings include: Accenture PLC; BlackBerry Ltd.; Cintas Corp.; FedEx Corp.; Nike Inc.

–

Friday December 19

Japan CPI

Euro zone economic confidence

Germany consumer confidence

(8:30 a.m. ET) Canadian retail sales for October. The Street expects a flat reading month-over-month.

(8:30 a.m. ET) Canada’s new housing price index for November. Estimate is a decline of 0.2 per cent from October and down 2.1 per cent year-over-year.

(8:30 a.m. ET) Canadian household and mortgage credit for October.

(10 a.m. ET) U.S. existing home sales for November.

(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Index for December.

Earnings include: Carnival Corp.; Paychex Inc.

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Empire Co. Ltd. says it earned $159 million in its latest quarter, down from $173 million in the same quarter last year. The company behind Sobeys says its profit amounted to 69 cents per diluted share for the quarter ended Nov. 1 compared with a profit of 73 cents per diluted share a year earlier. Sales for what was the company’s second quarter totalled $8.0 billion, up from $7.8 billion in the same quarter last year. Same-store sales were up 2.0 per cent, while food same-store sales rose 2.5 per cent. Empire also announced the appointment of Jo Mark Zurel to the company’s board of directors. Zurel is chair of the board at Fortis Inc. and also serves on the boards of Major Drilling Group International Inc. and Highland Copper Company Inc

• The S&P 500 and Dow Jones Industrial Average notched fresh highs.
• Disney to invest $1 billion in OpenAI and will license the startup its characters.
• SpaceX will launch IPO in 2026, Elon Musk confirmed. 
• Broadcom’s fourth-quarter results beat expectations, but shares slumped in extended trading.
• Analysts are re-looking their price targets for Oracle stock.

The S&P 500 and Dow Jones Industrial Average advanced on Thursday, with both hitting fresh closing records. The Russell 2000 index also ended the session at a new high, following the U.S. Federal Reserve’s quarter-point cut on Wednesday.

But if investors analyze Thursday’s individual stock movements, they will see not all is well with the AI play yet. Oracle shares plunged nearly 11% after reporting on Wednesday weak quarterly revenue, dragging down AI-related names such as Nvidia and Micron.

In extended trading, Broadcom shares fell 4.5%. The chipmaker beat Wall Street’s expectations for earnings and revenue, but CEO Hock Tan appeared to have failed to address worries that their largest customer, Google, might eventually make more of its chips in-house. Rising memory prices would also pressure margins, while the company’s chip deal with OpenAI might not be binding.

That’s why the tech-heavy Nasdaq Composite fell 0.26% despite other major U.S. indexes hitting records. Putting the two together, that means investors are rotating out of tech into other parts of the market. The S&P 500 financials sector, for instance, closed at a fresh record, buoyed by jumps in Visa and Mastercard.

Even though the AI theme seems to be under scrutiny, other sectors are performing well on the back of a resilient U.S. economy — as signaled by Fed officials on Wednesday — and buoyed by interest-rate cut. So long as nothing throws a spanner in the works, looks like we’re all set for a happy holiday season.

— CNBC’s Kristina Partsinevelos contributed to this report.

Gold edged lower on Thursday, as traders weighed the U.S. Federal Reserve’s divided vote on a quarter-percentage-point interest rate cut, while silver climbed to yet another record high.

Spot gold fell 0.3% to $4,216.49 per ounce. U.S. gold futures for February delivery gained 0.5% to $4,244.40 per ounce.

“It’s just an overpositioning (in gold) in expectation of the rate cut, which did happen, and therefore you’re seeing some selling pressure,” said independent analyst Ross Norman, adding that gold’s fundamentals remained intact.

The Fed cut interest rates by a quarter of a percentage point on Wednesday in a rare divided vote, but signalled a pause on further easing as officials look ahead to assess the direction of the job market and inflation that “remains somewhat elevated.”

Lower interest rates typically benefit non-yielding assets such as gold.

Projections issued after the two-day meeting showed most policymakers see just one rate cut in 2026. Fed Chair Jerome Powell offered no indication of when another cut might occur.

U.S. President Donald Trump said on Wednesday that the Fed’s rate cut could have been larger. Trump is set to announce the new Fed chair early next year, with White House economic adviser Kevin Hassett seen as a frontrunner.

Investors are now looking out for November’s non-farm payrolls and unemployment rate data, due on December 16, for further clues on the Fed’s next move.

Spot silver rose 0.6% to $62.16 per ounce, after hitting a record high of $62.88 earlier in the session, bringing its year-to-date gain to 115% on strong industrial demand, declining inventories and its addition to the U.S. critical minerals list.

“Silver’s fundamentals remain incredibly positive. There is a phenomenal tailwind with the critical minerals list and the possibility that we might see some stock building,” which would further increase market tightness, Norman added.

Canada posted a small monthly international trade surplus in September, reversing a trend of seven consecutive months of deficits, data showed on Thursday.

It registered a marginal trade surplus of $153-million in September, following a $6.43-billion deficit in the prior month, Statistics Canada said.

This was the first surplus that Canada has posted since President Donald Trump threatened and later imposed tariffs on critical sectors which choked significant exports to the U.S., Canada’s biggest trading partner. The bulk of the surplus was driven by a 44-per-cent jump in Canada’s trade surplus with the U.S., Statscan’s data showed.

The September trade data, which was due in November, was delayed as information for Canadian exports to the U.S. were unavailable due to a 43-day government shutdown in the U.S.

Canadian fertilizer industry in crosshairs of Trump administration’s price-fixing probe

Analysts polled by Reuters had forecast the trade deficit at $4.5-billion for September. Economists said the trade numbers show that Canada’s international merchandise trade was finally starting to normalize.

“Overall story is really positive,” said Prince Owusu, senior economist with Export Development Canada.

“It seems to suggest that the trade flow with the United States is beginning to stabilize,” he said, adding that the trend of diversification from the U.S. that started is also continuing.

Canada’s total exports in September grew by 6.3 per cent to $64.23-billion, rebounding from a drop of 3.2 per cent in August, and was driven by higher exports in nine out of 11 product sections. This was the largest percentage increase since February, 2024. This was led by U.S. exports that grew by 4.6 per cent and exports to countries other than the U.S. growing by 11 per cent, Statscan said.

Exports of metal and non-metallic mineral products and aircraft and transportation equipment and parts led the gains with over 20-per-cent rise in exports. In volume terms, total exports rose 4.1 per cent, the statistics agency said. Total merchandise imports dropped by 4.1 per cent in September to $64.08-billion.

Exports to the U.S. grew by 4.6 per cent in September to $45.84-billion, helped by outbound shipments of aircraft, light trucks and unwrought gold, Statscan said.

U.S. and Canada discussed tariff-rate quota for steel before trade talks halted

Exports to the U.S. grew to $45.84-billion from $43.83-billion in August, helped by outbound shipments of aircraft, light trucks and unwrought gold, Statscan said.

The U.S. accounted for over 71 per cent of Canada’s exports in September. Imports from the U.S. declined 1.7 per cent in September, a third consecutive monthly decrease, taking Canada’s trade surplus with the U.S. to its highest level since February.

Higher shipments of unwrought gold, crude oil and aircraft led the jump in exports to countries other than the U.S. Imports from countries other than the U.S. dropped 7.3 per cent. Canada’s trade deficit with countries other than the United States has narrowed sharply, posting the lowest deficit since October, 2024, Statscan said.

The Canadian dollar firmed in early trade and was trading up 0.2 per cent to 1.3767 to the U.S. dollar, or 72.64 U.S. cents. Yields on the two-year government bonds were down 0.2 basis points to 2.524 per cent.

Empire Co. Ltd. EMP-A-T -8.98%decrease says it earned $159-million in its latest quarter, down from $173-million in the same quarter last year.

The company behind Sobeys says its profit amounted to 69 cents per diluted share for the quarter ended Nov. 1 compared with a profit of 73 cents per diluted share a year earlier.

Sales for what was the company’s second quarter totalled $8-billion, up from $7.8-billion in the same quarter last year.

Same-store sales were up two per cent, while food same-store sales rose 2.5 per cent.

RBC analyst Irene Nattel said operating results were in line with forecast, “underpinned by solid merchandising strategies in place to address ongoing value-seeking consumer spending behaviour.”

She said Empire continued to execute on its strategy to maximize revenues in full-service stores despite the broader consumer shift to discount banners, while growing its discount presence.

Newly named chief executive Pierre St-Laurent said the company is looking to set up more storefronts “because we believe we have room to grow.”

“We are underdeveloped in discount, so we will grow discount,” he told analysts during a conference call on Thursday.

“We have a lot of white space in discount, but we won’t just focus on discount because there (are) other markets where it’s not a discount market and there’s more opportunity to grow our Farm Boy, our Longo’s, our Food Land.” 

Sobeys parent Empire names Pierre St-Laurent as CEO as Medline set to retire

Empire also announced the appointment of Jo Mark Zurel to the company’s board of directors.

Zurel is chair of the board at Fortis Inc. and also serves on the boards of Major Drilling Group International Inc. and Highland Copper Co. Inc.

 Dollarama Inc. reported a third-quarter profit of $321.7 million, up from $275.8 million in the same quarter last year. The retailer says the profit amounted to $1.17 per diluted share for the quarter ended Nov. 2, up from 98 cents per diluted share a year earlier. Sales for what was the third quarter of Dollarama’s 2026 financial year totalled $1.91 billion, up from $1.56 billion in the same quarter last year, boosted by the addition of 401 stores in Australia and growth in the number of stores in Canada. Comparable-store sales in Canada for the third quarter increased 6.0 per cent, including a 4.1 per cent increase in the number of transactions and a 1.9 per cent increase in average transaction size. In its outlook, Dollarama says it expects Canadian same-store sales growth of 4.2 per cent to 4.7 per cent for its 2026 financial year, up from earlier guidance for between 3.0 per cent and 4.0 per cent. The retail says it now expects Canadian gross margins between 45.0 per cent and 45.5 per cent, up from between 44.2 per cent and 45.2 per cent. Canadian capital expenditures are now expected to total between $240 million and $285 million, compared with earlier guidance for between $285 million and $330 million.

The Bank of Canada held its benchmark interest rate steady on Wednesday, moving back to the sidelines for what financial markets expect to be an extended pause. 

As widely anticipated, the central bank kept its policy rate at 2.25 per cent, following cuts in September and October. 

With the Canadian economy “proving resilient” in the face of U.S. tariffs, Bank of Canada Governor Tiff Macklem said that the policy rate was at “about the right level to keep inflation close to 2 per cent while helping the economy through this period of structural adjustment.”

He added that the bank could resume easing if an economic shock or accumulation of weak data “materially change the outlook.” 

Follow live updates on the Bank of Canada rate decision

Having lowered interest four times this year – and nine times since the summer of 2024 – the bank is now expected to remain on hold through the first half of next year. After the decision, financial markets are betting the bank’s next move will be a quarter-point hike in the fall of 2026, according to Bloomberg data.

In effect, monetary policy appears to have returned to a steady glide path after several years of volatility, which saw the bank cut the policy rate to near zero at the start of the pandemic then raise it rapidly to 5 per cent in an attempt to contain the biggest burst of inflation in 40 years. 

Headline inflation has been running at around 2 per cent for the past year, although core measures of inflation have been stuck around 3 per cent.  

Mr. Macklem said the bank believes underlying inflation is running at around 2.5 per cent, although he did not sound particularly concerned about upward pressure on prices.  

“In the months ahead, we will see some choppiness in headline inflation, reflecting the temporary GST/HST holiday on some goods and services a year ago. This is likely to push inflation temporarily higher in the near term,” he said, according to the prepared text of his press conference remarks. 

“Seeing through this choppiness, we expect ongoing economic slack to roughly offset cost pressures associated with the reconfiguration of trade, keeping CPI inflation close to the 2 per cent target.”

Fed expected to cut rates, signal less certain outlook for 2026

The bank’s move back to the sidelines follows a string of data suggesting the Canadian economy is weathering the trade war with the United States fairly well. Some industries, including steel, aluminum, lumber and automobiles, have been hit hard by U.S. tariffs. And business investment across many sectors is being constrained by uncertainty. 

But overall, the economy is proving surprisingly sturdy. After a steep contraction in the second quarter, led by a collapse in exports, Canadian gross domestic product grew at an annualized pace of 2.6 per cent in the third quarter. 

Some of this growth was the result of a statistical quirk tied to a swing in trade numbers. But the headline result was much stronger than expected, and a large upward revision to GDP numbers for the past three years suggests the Canadian economy was in better shape than realized heading into the current period of trade turmoil. 

“We expect growth in final domestic demand to resume, but with an anticipated decline in net exports, GDP growth is likely to be weak in the fourth quarter before picking up in 2026,” Mr. Macklem said. 

The labour market remains weak, but appears to be trending in a positive direction. Canada added around 180,000 jobs over the past three months and the unemployment rate fell to 6.5 per cent in November from 6.9 per cent the month before. 

Mr. Macklem said that the economic outlook remains uncertain, especially given the review of the United States-Mexico-Canada free trade agreement next year, which could create more trade friction. And he reiterated his view that U.S. protectionism “means our economy works less efficiently, with higher costs and less income.”

At 2.25 per cent, the policy rate is at the lower end of what the central bank considers to be a “neutral range” for interest rates, which neither stimulates nor constrains economic activity. 

“We agreed that a policy rate at the lower end of the neutral range was appropriate to provide some support for the economy as it works through this structural transition while keeping inflationary pressures contained,” Mr. Macklem said. 

Mr. Macklem and Senior Deputy Governor Carolyn Rogers will hold a press conference at 10:30 am ET.