Equity futures are steady this morning, following a down day for markets after Walmart’s disappointing earnings forecast. Nasdaq futures are getting some help this morning after Alibaba’s strong earnings boosted tech optimism. Closer to home, investors are digesting the latest retail data which showed Canadian retail sales falling -0.4% in January after a 2.5% rise in December, the largest gain since May 2022. December’s advance was driven by a federal sales tax holiday and broad-based spending across all sectors and provinces. Despite recent rate cuts boosting consumer spending, particularly in auto sales, the estimated January decline marks the first contraction in seven months. With inflation near the 2% target, the BoC may pause its easing cycle at the March 12 meeting, although potential U.S.-Canada trade tensions could prompt further rate cuts to support economic growth.
More than half of Canadians renewing their mortgages in 2025 expect higher monthly payments, with 81% of those anticipating an increase saying it will strain their finances. Of the 1,340 respondents, 34% foresee significant financial pressure. While 25% expect stable payments and 15% anticipate a decrease, many plan to cut discretionary spending, travel, and savings. Despite the strain, 62% aren’t considering relocating or downsizing. Fixed-rate mortgages remain popular, with 66% opting for them, and 37% favouring five-year terms. On the bright side, interest rate cuts by the BoC are providing some relief.
Trump is intensifying his focus on tariffs as a revenue source to fund tax cuts and balance the federal budget, with White House estimates suggesting potential collections between $500 billion to $1 trillion over a decade. Plans include imposing a 25% tariff on numerous imports, with an emphasis on targeting Canada, China, Mexico, and the EU. While the administration has praised tariffs as a solution to trade imbalances and fiscal deficits, economists warn of risks including slower economic growth, retaliatory measures from trade partners, and higher consumer prices. Trump’s strategy heightens the likelihood of global trade tensions escalating into full-scale trade wars.
U.S. and Ukrainian negotiators are working to finalize a critical minerals deal, aiming to secure U.S. access to Ukraine’s resources in exchange for security guarantees. Ukraine rejected the initial U.S. proposal seeking 50% of mineral proceeds, citing legal violations, and proposed revisions to benefit both sides. The deal is key to President Trump’s strategy to end the three-year war, though tensions with President Zelenskiy intensified by Trump calling him a dictator have certainly complicated talks. Despite disputes over Ukraine’s elections and mineral rights, both countries aim to sign the agreement with their presidents present.
Fears of stagflation are resurfacing in the U.S. amid stubborn inflation and Trump’s aggressive trade policies. Consumer prices rose at their fastest monthly pace since August 2023 last month, with annual inflation hitting 3%. With Trump’s tariffs targeting imports of steel, autos, and more, experts warn they could raise costs for consumers and slow growth. A Bank of America survey shows stagflation expectations at a seven-month high, though investors remain bullish on stocks. Gold’s record highs signal investor caution, while strategies diverge between short- and long-term Treasuries amid uncertainty.
U.S. companies with overseas operations are increasingly using cross-currency swaps to cut debt costs and hedge against currency volatility. By converting U.S. dollar interest payments into euros, firms have been able to save up to 200 basis points, taking advantage of lower euro rates and a weaker euro, which hit a two-year low in early 2025. Demand for these swaps rose 7% in January, reaching $266 billion. While the strategy reduces borrowing costs, it carries risks if foreign currencies strengthen, potentially offsetting savings.
Mexico’s economy contracted by 0.6% in Q4 of 2024, marking its largest quarterly decline since 2021, with annual GDP growth slowing to 0.5%. The downturn stemmed from weakened manufacturing exports and a severe drought affecting agriculture. Economic uncertainty is heightened by tight fiscal conditions, domestic policy concerns, and potential U.S. tariffs, as President Trump considers a 25% duty on Mexican exports. Given these challenges, Mexico’s central bank revised its 2025 GDP growth forecast down to 0.6% from 1.2%, though it maintained a 1.8% projection for 2026.
It couldn’t have been scripted any better. Last night’s nail biting, edge of your seat final game of the Four Nations Face-off exceeded expectations in all manners – especially since Canada came out victorious in the end. Connor McDavid’s game winning OT thriller was fitting, the best in Canada gets the win for Canada. We’d be remiss not to give a shoutout to Jordan Binnington, the team’s goaltender, who despite naysayers, stole the game for Canada in OT, making highlight reel-worthy stops to keep the team alive. Too many worthy memories to recount. If anyone questioned whether today’s best hockey players would show up for these types of international mini-series games, you have your answer. It’s only been a hot minute, but some eyes are already turning to the next great international showdown, the Olympics. If the Four Nations Face-off was any indication, we’re in for something special when the world’s best battle for gold in 2026. 350 days and counting. For those who missed last night’s game (who are you?), enjoy the game highlights.
Diversion: Put this in the Louvre
