Today
Equity futures are trying to get in the green following good U.S. inflation data but are pointing to a lower open as the AI induced selloff yesterday continued to weigh on markets with volatility picking up this week. The so-called AI scare trade has seen knee-jerk selloffs in sectors from logistics to software providers amid fear the technology will hurt their businesses, with the latest victim being the office real estate sector. U.S. inflation data out this morning showed CPI (y/y) coming in lower than expected at 2.4% vs 2.5%, while core CPI (y/y) reported in line at 2.5%. Both figures were below their prior readings. U.S. Treasuries jumped after the data was released with markets pricing in higher expectations that the Federal Reserve will lower interest rates three times in 2026. Hopefully, the markets will be a little quieter today with many Canadian and Americans heading into a long weekend, and Lunar New Year celebrations next week.
The Canadian dollar may be rising against the U.S. dollar (although modestly), but it’s lagging other currencies. The loonie’s gains reflect broad U.S. dollar weakness rather than true strength, with CAD flat or weaker on a trade-weighted basis and down versus currencies like the Australian and New Zealand dollars. Analysts point to structural disadvantages including Canada’s lower interest rates, weaker domestic demand, softer terms of trade, and heavier dependence on the U.S. economy, while Australia and others benefit from stronger links to faster-growing Asian markets. Investor sentiment also favours alternatives, with positioning far more bullish on currencies like the Aussie, peso, and real, leaving the loonie’s recent shift to net-long bets seen as low conviction and more about fading confidence in the U.S. dollar than enthusiasm for Canada itself.
While we’re on the subject, safe-haven currencies such as the USD, Japanese yen, and Swiss franc have faced unusual volatility over the past year, leaving investors to rethink their defensive roles. The dollar has weakened amid erratic U.S. trade policy, rising fiscal concerns, and political pressure on the Fed, with the dollar index plunging more than 9% in 2025 and extending losses into this year. Some analysts have argued the dollar’s safe-haven status is overstated, noting its inconsistent correlation with equity markets and warning of a longer-term bear market. The yen has also been unstable, swinging on Bank of Japan policy shifts, expansionary fiscal signals from Prime Minister Sanae Takaichi and speculation about currency intervention as it nears the 160 level against the dollar. In contrast, the Swiss franc has strengthened nearly 13% against the dollar last year, hitting multi-year highs, though that strength is creating challenges for Switzerland’s export-driven economy and complicating monetary policy as inflation hovers near zero.
Mixed jobs reports? Canada’s job market either rose or stalled in late 2025 depending on which Stats Canada survey you’re looking at, highlighting the significant difference between the Labour Force Survey and the Survey of Employment, Payrolls and Hours. While the former suggests roughly 200,000 jobs were added in the six months to November and 310,000 year over year, the Survey of Employment shows a loss of 5,000 jobs over six months and only 47,000 gained from a year earlier, with an average gap of 760,000 jobs between the two measures in 2025. So where to look? Experts say that it is best to look at the Survey of Employment as it likely provides the more accurate picture because it is based on actual payroll data from businesses rather than household surveys and may better capture shifts during Canada’s recent demographic swings. Economists argue that the Labour Force Survey may be overstating employment due to assumptions about stable population growth and inconsistencies in sector-level data, where it shows gains that other reports show as losses. So all told, economists are of the view that Canada’s labour market momentum may be weaker than headline figures suggest.
Office real estate stocks fell for a second straight day yesterday as investors rotated out of business models seen as vulnerable to AI disruption, with some stocks seeing falls that rivaled Covid and the global financial crisis. The selloff reflects a broader market shift that has already hit software, financial services, and logistics firms, as fears grow that AI tools could replace labour-intensive, high-fee service models. Concerns grew after reports surfaced that major firms could see job losses and replace entire office towers of workers. Despite the panic, some analysts argue the reaction may be overdone, noting that commercial real estate fundamentals remain stable and that firms continue to post earnings beats and strong guidance.
Well, that’s offensive. As most hockey parents can attest to, hockey can be a stinky sport. However, what do you do if your fans do too. It’s been a tough season for the OHL’s Oshawa Generals, holding a league-worst record of 12-36-3 through 51 games. However, the on-ice struggles aren’t the only issue the organization is facing. A message was recently sent to season ticket holders, asking the fans to be mindful of their personal hygiene when attending games. “We’re thrilled to have you with us each and every game and appreciate the energy you bring to the arena…To help ensure a clean, comfortable, and enjoyable experience for everyone, we kindly ask for your cooperation with a few simple hygiene practices. Please make use of the hand-sanitizing stations located throughout the arena, cover coughs and sneezes, and be mindful of personal cleanliness while sharing our space with fellow fans.” And then the statement went on to add “if you went to the gym or did something that produced body odor, please shower before attending the game.”
Diversion: Stealth mode
