FINWIRES · TerminalLIVE
FINWIRES

BMO on The Day Ahead in Canada

By

Statistics Canada will publish the advance read on manufacturing activity for April at 8:30 a.m. ET on Tuesday, said Bank of Montreal (BMO).

The sector previously just pulled off two strong months with gains in excess of 3% month over month, although volumes are still down from a year ago because of softness through the second half of 2025, noted the bank.

Investors will also hear from the Bank of Canada on Tuesday, added BMO. External Deputy Governor Nicolas Vincent speaks at 8:20 a.m. ET on "trends in the labour market and structural change in the Canadian economy."

Related Articles

Treasury

Commerzbank on Overnight News

Commerzbank in its "European Sunrise" note of Tuesday highlighted:Markets: United States Treasury futures reverse Monday's rally, 10-year yields near 4.5%. E-minis weaken from record highs. Brent falls below US$100/barrel, hovers sideways around US$98/barrel. The US dollar (USD) is "modestly" supported.Fed: Kevin Warsh sworn in as Federal Reserve chair, unanimously selected by FOMC. He says he will lead a "reform-oriented Fed," pledges inflation can be lower "with independence and resolve." President Donald Trump says Warsh will curtail Fed practice of forward guidance, calls on him to be "totally independent" and "do his own thing."Iran war: The U.S and Iran have developed a "framework" to extend the ceasefire by 60 days, reopen the Strait of Hormuz in exchange for lifting the U.S. blockade of Iranian ports and Iran being free to sell oil. Negotiations on curbing Iran's nuclear program to follow within 30 to 60 days (FT, NYT, Axios). Iran agrees in principle to give up enriched uranium (NYT) but demands it be transferred to China (Al Arabiya). Trump says enriched uranium will preferably be destroyed in Iran. He is "50/50" on deal or bombs, later says agreement "nearly done" and deal to be announced shortly," before walking back saying he told officials not to rush; deal will be "exact opposite" of 2015 Joint Comprehensive Plan of Action (JCPOA).U.S./Iran: The U.S. and Israel strike missile launch sites and boats. The U.S. says it continues to use "restraint" during the ongoing ceasefire.==EUROPE:ECB: President Christine Lagarde says the situation is too uncertain to commit on rates, the European Central Bank to look at all data to assess the economy in June. Inflation projections likely to be revised. Governing Council (GC) member Madis Muller sees "good case" for June hike on energy surge. GC member Yannis Stournaras says a hike may be inevitable to keep credibility, sees inflation as "sticky." GC member Martin Kocher sees pressure to hike, unless the Iran situation improves. GC member Isabel Schnabel says ECB should raise rates even if peace deal is struck.ECB plans to summon banks on Tuesday to discuss cyber-security flaws exposed by Artificial Intelligence model "Mythos" (FT).EU: The International Monetary Fund says European Union energy, defense and innovation should be financed via joint debt (FAZ cites paper discussed at last week's Eurogroup).France: Far-right RN President Jordan Bardella would beat Edouard Philippe by 52-48% in presidential runoff (Odoxa poll).Ratings: Fitch affirms Belgium at A+/stable. DBRS confirms Slovenia at AA (low)/stable. Scope downgrades Slovakia to A-/stable from A/negative, affirms NRW at AAA/stable, and China at A/stable.U.K.: British Finance Minister Rachel Reeves eyes 22% charge on interest earned from cash (Telegraph sources).==ASIA:Japan: Prime Minister Sanae Takaichi says extra budget spending will be just over three trillion yen, won't increase bond issuance on a calendar basis.

$$CXY$$USD
Treasury

Gasoline Prices to Hit Canada's Consumers, Says BMO

Canadian consumers have been hanging on, spending their way through significant headwinds, including economic uncertainty and outright population decline, said Bank of Montreal (BMO).Unfortunately, the most recent shock -- in the form of higher energy prices -- will prove a tougher challenge, noted the bank.The March retail sales report showed headline spending rose 0.9% in the month, but that was entirely due to higher gasoline prices. Sales volumes fell 0.7% month over month, although earlier strength still leaves real spending up in Q1.Indeed, real spending stepped up "meaningfully" in per capita terms, stated BMO."Unfortunately," the softness in March looks to continue as prices remained elevated -- gasoline increased again, by almost 10% in April alone, pointed out the bank.The flash estimate for April points to a modest increase, but volumes could potentially decline for the second straight month, added BMO.While it's been an impressive showing for Canadian consumers so far, the spike in prices is leaving a mark. Ultimately, spending looks to remain under pressure until energy prices "normalize," according to the bank.

$$CXY
Treasury

SocGen's Overnight Economic News Summary

Societe Generale in its early Tuesday economic news summary pointed out:Mild risk off, yields retreat on flight-to-quality, Brent rebounds 2.2% from one-month low of US$95.95/barrel as the United States launches "self defense" military strikes on Iranian missile sites, boats around the Strait of Hormuz. The two-year U.S. Treasury down 7bps at 4.05%, 10-year UST slips 5bps at 4.50%. EUR/USD steadies around 1.1630, contained by option expiries at 1.1600-45 (3.5 billion euros).European Central Bank's Schnabel in an interview with Reuters: "From today's perspective, I think a rate hike in June will be needed. Given the size and the persistence of the current shock, looking through is no longer an option in my view."The U.S. and Iran said to be working toward a Memorandum of Understanding (Secretary of State Rubio), disputes over language concerning nuclear program and the lifting of sanctions holding up finalization of deal. Optimism that the differences will be resolved "relatively soon." Iran: "degree of understanding" has been reached on many issues, but agreement isn't imminent.Week ahead: U.S. PCE inflation on Thursday, durable goods orders, consumer confidence, gross domestic product second read. The consumer price index for Germany, France, Italy, Spain on Friday. Reserve Bank of New Zealand forecast to stay on hold. South African Reserve Bank forecast to hike by 25bps, Bank of Korea and Malaysia's MNB forecast to stay on hold.Nikkei -0.4%, EUR 10-year IRS +1bp at 3.0%, Brent crude +2.2% to US$98.2/barrel, Gold -0.9% at US$4,531/oz.

$$CXY$$EUR$EUR/USD