Launch Pad

Canada’s labour market weakened in January as the economy lost 24,800 jobs, the steepest drop since August, driven largely by manufacturing layoffs linked to U.S. tariffs. Still, the unemployment rate fell to 6.5% because fewer people were actively looking for work. Data from Stats Canada showed Ontario saw the most job losses, shedding 67,000 positions, with the auto sector hit hard and GM cutting about 500 jobs at its Oshawa plant. Manufacturing employment fell by 51,000 over the past year, and more workers in export-dependent industries are considering quitting as trade tensions continue under Trump’s tariffs. The participation rate dropped to 65% as more Canadians exited the workforce, reflecting both demographic aging and immigration curbs, which helped mask underlying weakness. Meanwhile, wage growth cooled to 3.3%, suggesting softer labour demand and adding to signs that momentum in Canada’s job market is fading. 

Central banks across the globe are beginning to diverge on policy as inflation, growth, and currency pressures play out differently by country. The Fed has paused but markets still expect at least one rate cut this year, while the Bank of England held steady with a narrowly split, dovish vote that points toward possible easing. The ECB and BoC are also on hold, citing trade and geopolitical risks. Meanwhile, the Reserve Bank of New Zealand has turned more hawkish as inflation reaccelerates and central bankers in Australia have begun hiking again on strong demand and housing pressures. Finally, the Bank of Japan continues tightening to counter a weak yen and rising prices, highlighting a clear split between economies still considering cuts and those returning to rate increases. 

Staying with central banks, BoC Governor Tiff Macklem said yesterday that cutting interest rates too quickly could backfire as Canada’s economy adjusts to deeper structural changes rather than a simple cyclical slowdown. He argued that weakness tied to trade disruptions, tariffs, and slower population growth reflects reduced productive capacity, meaning rate cuts aimed at stimulating demand could instead reignite inflation. He believes monetary policy can smooth the transition but cannot replace lost supply or efficiency caused by rising trade friction and shifting global conditions. Officials now expect growth to remain modest and uneven, with productivity and potential output improving only gradually over years and not quarters, as the economy restructures. The tone signalled that the BoC will tread carefully, prioritizing inflation control over aggressive easing even if activity stays soft in the near term. 

Consumer brands are ramping up marketing and planning selective price hikes to offset tariff-driven cost pressures, chasing higher-income shoppers who continue to spend. With middle- and lower-income consumers squeezed by rent, food prices, and a softer labour market, companies are leaning into “affordable luxury” and premium products, betting wealthier buyers will be more resilient.  Companies like Estee Lauder, Ralph Lauren, and Canada Goose are increasing ad spend and brand investments even as tariffs threaten profits and margins. Investors don’t seem as confident though, with shares of these firms declining in recent weeks. In any case, it appears that the sector is accepting near-term cost and earnings pressure in hopes that stronger brand positioning and upscale demand will stabilize growth as tariff impacts peak. 

CapEx! Tech giants Alphabet, Amazon, Meta, and Microsoft, plan to pour roughly $650 billion into capital expenditures this year as the race to dominate AI accelerates, funding massive data centers, chips, networking gear and power infrastructure. The scale of spending, up about 60% from a year ago, is being compared to historic build-outs like the telecom boom or national infrastructure projects. Meta may lift capex as high as $135 billion, Microsoft $105 billion, Alphabet around $185 billion and Amazon roughly $200 billion, showing just how critical AI computing capacity has become to their growth plans. The build-out, however, is straining energy supplies, construction capacity, and semiconductor availability, all while raising concerns that such concentrated investment could distort economic data and crowd out other users of power and resources. Although the companies argue the spending will unlock future revenue, investors are wary about execution risks, rising debt, and whether returns will justify the costs. 

Bitcoin continued to slide yesterday, falling to just over $63,000 as a wave of forced liquidations and broader market volatility erased all of the gains that followed Trump’s election, underscoring how quickly sentiment has flipped in crypto markets. The world’s largest token, Bitcoin, dropped as much as 12%, leaving it nearly 50% below the record high reached just four months ago and dragging down smaller coins, crypto ETFs and related stocks. The selloff has been compounded by leveraged bets unwinding, ETF outflows of billions of dollars, and a broader risk-off mood tied to geopolitical tension and weakness in tech names. After last year’s rally fueled by hopes for friendlier policies under Trump, the downturn highlights that Bitcoin still behaves more like a high-risk asset than a safe haven, leaving traders cautious and bracing for further volatility. 

#GOCANADA. The 2026 Winter Olympics in Milan Cortina officially kicks off today and runs through Feb. 22. Unlike past winter Olympics, it will be spread across northern Italy, with ice sports centred in Milan and alpine events hosted across several mountain hubs. It will be the most geographically dispersed Winter Games to date. For Canadian viewers, the timing is manageable with most marquee events, including hockey, airing late morning to early afternoon ET. The primary broadcaster is CBC, with full live and on-demand coverage available through CBC Gem. Additional coverage, highlights, and select events will also air on TSN and Sportsnet. One feature of these games is the return of NHL players to the men’s hockey tournament for the first time since 2014. It will mark the first Olympic appearance for this next generation of hall of famers including Connor McDavid who will play in his first Olympics alongside Captain Sidney Crosby (who can forget the golden goal), who will likely be playing his last.   

Copper is lower, extending its retreat from a record high reached last week as the focus turned back to softening demand following a speculative buying frenzy that saw prices break free from fundamentals. Copper is on track to post its worst weekly performance since April. Underscoring the tepid near-term consumption outlook, inventories at warehouses monitored by futures exchanges in London, Shanghai and New York are showing the highest levels since 2003. On the analyst side, BNP Paribas SA joined banks including Goldman Sachs Group Inc. in warning copper had overshot fundamentals. In a recent research note, t.he metal is “still overvalued” and levels above $11,000 to $11,500 a ton are “almost entirely speculatively driven.” Copper had been rising since the middle of 2025 on supply outages and a strong long-term demand outlook for a metal that’s critical to the energy transition, as well as the threat of U.S. import tariffs. Looking ahead, volatility in base metals will likely drop starting next week as many Chinese traders will stay on the sidelines before the Lunar New Year holidays. Open interest for copper on the Shanghai Futures Exchange dropped to the lowest since Dec. 4.