Morning Market Brief: September 5, 2023

A shorter trading week with key announcements?

Economic activity in Canada declined by an annualized rate of 0.2% in the second quarter of 2023 in contrast to forecasts for 1.2% growth. Growth was flat quarter on quarter versus 0.6% in the first three months of 2023. The slowdown indicates that the economy could be cooling overall and responding to the Bank of Canada’s (BoC) interest rate hikes. This week, the BoC will make its interest rate decision and here are some other announcements to consider.?

• Europe’s producer prices for July will be announced by Eurostat on Tuesday. Year-on-year prices declined in May and June after more than two years of growth.
• US factory orders for July will be released on Tuesday by the US Census Bureau. New orders were up by 2.3% in June compared to May.?
• The BoC announces its interest rate decision on Wednesday. The central bank raised its policy rate by 25 basis points to 5% in July.
• China’s General Administration of Customs provides an update about August exports on Wednesday. Exports fell by 14.5% year-on-year in July.
• Japan’s Cabinet Office releases final estimates on GDP growth in the second quarter of 2023 on Thursday. The preliminary estimate was 6%.

Although this trading week is shorter on account of Labour Day, it will be impactful given the BoC’s interest rate announcement and a Canada labour market update to round off the week. Unemployment has climbed from 5.2% in May to 5.5% in July. In China, indicators of declining trade volume could encourage policymakers to look for more ways to support the economy. Last week, deposit requirements in China for first time home buyers were cut from 30% to 20%.

At?CIBC Private Wealth, we aim to take a comprehensive approach to managing, building and protecting your wealth. If you'd like to discuss this market and economic update in more detail, please get in touch with your advisor any time.