Morning Market Brief: February 20, 2024

Critical Canadian economic announcements come this week?

Statistics Canada (StatsCan) will be busy this week with two key economic reports that market participants will closely monitor. Both might provide some insight into the potential actions from the Bank of Canada at its next meeting. South of the border, investors will search for clues for the timing of the US Federal Reserve Board’s (Fed) potential rate cuts when its meeting minutes are released. Here’s what to watch for this week.?

• Canada’s inflation rate for January will be released today. In December, the inflation rate moved higher to 3.4%, largely in response to an increase in gasoline costs. Economists are estimating that inflation softened in January but remained well above the BoC’s 2% target.
• Canadian retail sales will be announced on Thursday, providing a glimpse into the health of Canadian consumers. Retail sales dropped by 0.2% in November, following two straight monthly increases. StatsCan estimated an increase in December.
• Not to be outdone, the US will deliver some key economic results this week. The minutes from the Fed’s last meeting will be released on Wednesday. Manufacturing sector activity and existing home sales will be announced on Thursday.
• And keep up to date on economic announcements from elsewhere around the world. They include Japan’s trade balance today, European Central Bank meeting notes on Wednesday, European services sector activity on Thursday and Germany’s economic growth on Friday.
• Notable earnings in Canada include Suncor, Nutrien, CCL, Teck Resources, Quebecor and Loblaw. Key earnings in the US include Home Depot, Walmart and NVIDIA.

There will be plenty of economic information to monitor this week. Financial markets have posted wide swings to date in 2024 as investors anticipate when and how deep central banks will go with their rate cuts. North American equity markets will also be driven by the earnings reports this week, which come from several industry heavyweights, giving a glimpse into the health of consumer and business activity.

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