Financial News · Live Terminal

S&P/TSX CompositeS&P/TSX Composite$CXY

Brief: Canada Gains 88,000 Jobs, or 0.4% M/M, in May; MUFG Says Consensus Saw 10,100 Increase

Nomura Previews Next Week's Bank of Canada Policy Meeting

Nomura said it expects the Bank of Canada to keep rates unchanged, including the policy interest rate at 2.25%, at next week's policy meeting.Canada's central bank is slated to release its policy statement at 9:45 a.m. ET on Wednesday.Data released since the April meeting has been dovish, noted Nomura.Labor markets have continued to cool, core inflation has remained within the BoC's target range and Q1 gross domestic product fell short of expectations.BoC Governor Tiff Macklem is likely to acknowledge softer domestic demand, but avoid putting excessive weight on the "technical" recession label, stated the bank.Nomura estimates the governor to reiterate data dependence and refrain from signaling the direction of the next move.Downside risks to growth from geopolitical uncertainty and USMCA trade deal renegotiations persist, added the bank. With labor markets softening and inflation contained, Nomura predicts the BoC to maintain an accommodative stance and keep rates unchanged through 2026.

BMO on The Day Ahead in Canada

Canada is scheduled to release the Labour Force Survey (LFS) for May at 8:30 a.m. ET on Friday, said Bank of Montreal (BMO).The labor market remains on a softening path and the May LFS will continue that trend, noted the bank.Although BMO expects a rebound in employment, the bank's call for 8,000 net new jobs will offset less than half of the previous month's decline. Economic uncertainty continues to restrain hiring, while tariffs are driving outright layoffs in certain sectors.Meantime, the unemployment rate is expected to stay at 6.9% as the labor force has stagnated amid a declining population and underlying demographic aging, pointed out BMO. Overall, the labor market will struggle to gain momentum until Canada gets some clarity on the trade front, and/or long-awaited infrastructure projects materialize.Also, on the Canadian docket at 10 a.m. ET Friday, the Ivey PMI for May is due, added the bank. In April, it was 57.7, a seven-month high.The US dollar (USD) is weaker (BBDXY -0.20%), with the Canadian dollar (CAD or loonie) stronger (CAD per USD -0.25%) ahead of the LFS and the United States nonfarm payrolls (NFP) on Friday, according to BMO.

$CAD$CXY$USD

Commerzbank on Overnight News

Commerzbank in its "European Sunrise" note of Friday highlighted:Markets: United States Treasuries weaken into the New York close, sideways in Asia. E-minis pare gains amid weaker Asian equities. The euro (EUR) is little changed. Brent recovers but remains below US$96/barrel.Fed: San Francisco Federal Reserve President Mary Daly says policy is in a good place, but uncertainty lies ahead, thinks forward guidance could be misleading now. Kansas City Fed President Jeffrey Schmid says the economy is "by and large" in a good place, calls inflation the biggest risk, adds that the key question is how patient the Fed should remain on rates.U.S.: Treasury Secretary Scott Bessent says any further Russia oil waivers would be country-specific, says existing waiver kept overall energy prices lower. The U.S. administration is tougher on Russia than "anyone."Iran war: President Donald Trump says the U.S. has wiped out almost all of Iran's leadership and doesn't need any European help in the Strait of Hormuz. Reiterates that talks are going well and that war would be restarted if U.S. troops are killed. The core part of any deal is no nuclear weapon for Iran and the reopening of Hormuz.Middle East: Hezbollah rejects ceasefire with Israel, says ceasefire must include all of Lebanon.Russia-Ukraine war: Ukrainian President Volodymyr Zelenskiy proposes meeting with Russian President Vladimir Putin to end the war in an open letter.==EUROPE:BoE: Bank of England Governor Andrew Bailey says markets have been orderly though stretched at times, warns debt-market leverage raises questions on vulnerability.U.K.: Greater Manchester Mayor and Labour candidate Andy Burnham confirms plans to challenge Prime Minister Keir Starmer for premiership in BBC town hall.==ASIA:Japan: Finance Minister Satsuki Katayama says the country can respond to foreign exchange as needed at any time; "bold actions" permitted under the U.S.-Japan currency statement.

$CXY$EUR

SocGen's Overnight Economic News Summary

Societe Generale in its early Friday economic news summary pointed out:Brent steady around US$95/barrel into nonfarm payrolls (NFP), United States/Iran peace talks stall after Hezbollah rejected U.S.-brokered truce in Lebanon. President Trump is open to meeting with Iran's new supreme leader if there's an agreement to end the war. The House approves more aid to Ukraine (US$8 billion for weapons) and imposes sanctions on Russia. 10-year U.S. Treasury support 4.40%, resistance 4.53%. OIS December 2026 FOMC +16bps.India: Reserve Bank of India leaves key rate unchanged at 5.25%, vote unanimous, stance neutral. FY27 gross domestic product forecast lowered to 6.6% from 6.9%, inflation raised to 5.1% versus 4.6%. USD/INR -0.3% at 95.50, 10-year IGB yield -4bps at 6.95%.Day ahead: U.S. NFP, SocGen forecasts 125,000 gains, consensus is for 85,000, while the range is between 45,000 and 125,000, whisper 99,000. Eurozone Q1 GDP third reading. Bank of England speakers Dhingra and Bailey. United Kingdom DMP three-month output price and one-year consumer price index expectations. Canada's Labour Force Survey (LFS). Turkey's CPI.Nikkei -1.4%, EUR 10-year IRS unch at 3.06%, Brent crude +0.5% at US$95.5/barrel, Gold -0.8% at US$4,440/oz.

$CXY$EUR$USD/INR

US Treasury Yields Mixed Pre-Bell Ahead of Nonfarm Payrolls, Crude Oil Extends Decline Second Day Amid Stalled Iran Peace Talks

US 10-Year Treasury Yield Slips 1 Basis Point to 4.47%, 2-Year Rate Down 1 Basis Point to 4.04% Early Friday

Guangdong Electric Power Development Controlling Shareholder Reduces Stake After Bond Conversion; Shares Slide 5%

Guangdong Electric Power Development (SHE:000539) controlling shareholder Guangdong Energy Group's stake in the company decreased following the conversion of bonds into 58.3 million shares.The shareholding of Guangdong Energy Group, along with Guangdong Electric Power Development and Guangdong Energy International Investment, fell to 68.3% from 69.41% as a result of the conversion.Shares fell 5% during the midday break on Friday.

SHE:000539

US Treasury Closing Levels

3:00 Thursday vs 3:00 Wednesday2yr 99-30 vs 99-29+; 4.048% vs 4.047%5yr 99-23 vs 99-21; 4.186% vs 4.176%10yr 99-06 vs 98-07; 4.476% vs 4.475%30yr 100-10+ vs 100-11; 4.475% vs 4.990%2/10 42.555 bps vs 41.558 bps5/30 78.964 bps vs 79.987 bps

Bell Prices Cash Tender Offers for Debt Securities

BCE (BCE.TO) unit Bell Canada priced its separate offers to purchase for $1.45 billion in cash all tendered debentures, the company said on Thursday.The debentures expiry dates range from 2028 to 2047.The settlement date for payment expected to be June 5. Bell said the financing condition described in the offer to purchase has been satisfied as a result of the closing of the company's public offering of two series of Canadian medium term notes totaling $1.6 billion.BCE shares were last seen down $0.58 to $33.50 on the Toronto Stock Exchange.Price: $33.50, Change: $-0.59, Percent Change: -1.72%

$BCE.TO

Montreal's Housing Market Continues to Slow in May, Says National Bank

According to National Bank of Canada's preliminary estimate based on Centris data, Montreal's seasonally adjusted home sales fell by 1.8% in May from April, following a 4.3% decline the previous month.This marks the fifth decline in seven months, noted the bank.This weakness comes amid trade and geopolitical uncertainties, a recent rise in fixed mortgage rates due to soaring inflation and a significant deterioration in the labor market in the Montreal region since the start of the year, stated National Bank.In fact, the unemployment rate in the Montreal Census Metropolitan Area (CMA) jumped from 6.3% in January to 7.7% in April, very close to the 7.9% observed in Toronto. If this weakness in the labor market is confirmed by data in the coming months, there is a risk of further deterioration, added the bank.For now, transactions in the Montreal residential market are at their historical average in May. This situation contrasts with the markets in Vancouver and Toronto, where home sales in May are 32.7% and 18.3% below their long-term averages, respectively.National Bank believes the relative resilience of the Montreal market is partly due to better affordability conditions in the Quebec metropolis.

Scotiabank Previews Friday's Labor Market Report in Canada

Canada updates the Labour Force Survey (LFS) for May on Friday at 8:30 a.m. ET, said Scotiabank.Consensus sits at a 10,000 gain in jobs, with most expecting a rise except for an anonymous entry, noted the bank.Scotiabank estimates a 25,000 increase, with an unchanged unemployment rate of 6.9%.May is when university and college grads heave a sigh of relief after completing exams, pointed out the bank. It's also when traditionally seasonal types of employment that are often filled by youths take off, such as at bars, restaurants, hotels, etc.This year's summer job market is tracking similarly to last year's, but this might understate employment opportunities for young people in the 15-24 age category of this LFS, stated Scotiabank. That's because the population of temporary residents -- comprised of temporary foreign workers, international students and asylum seekers -- is falling due to the tightening of immigration policies.As a consequence, the prior reductions in temps that may have flattened hiring in traditionally seasonal sectors could open up more opportunities for youths to fill seasonal jobs in ways that seasonal adjustments may not adequately control.The bank thinks the tighter immigration policy has caused some of the weakening in employment of late and that the pressure will be upon Canada to begin raising the targets once more within a couple of years or so.

IQVIA Reports Pricing of Senior Notes Offering

IQVIA (IQV) said Thursday that a subsidiary has priced an offering of 950 million euros ($1.10 billion) of 4.625% senior notes due June 15, 2033.Proceeds will be used to refinance its debt, the company said. It expects to issue the notes on June 11.IQVIA shares were up about 3% in morning trading.Price: $187.71, Change: $+5.66, Percent Change: +3.11%

$IQV

TD on Canada's Labor Market, Recession Risk in the Age of AI

Canada's labor market adjusts slowly, which has historically cushioned it during downturns, but this stabilizing feature may become a vulnerability, said TD.Artificial Intelligence (AI) adoption alone is unlikely to immediately threaten workers, writes the bank in a note to clients. Digital technology will change how work is performed, but employees will continue to play a key role in an AI-empowered world.Where Canada is in the business cycle matters, stated TD. Recessions tend to catalyze strategic change inside firms.When weak demand intersects with rapid cost-saving technological adoption, employers are more likely to redesign workflows and positions, increasing the risk that jobs lost in a downturn don't return in their prior form, added the bank.When technology permanently displaces roles, policies should prioritize faster worker transitions through flexible, affordable retraining and human-centric skill development, rather than job retention, which risks higher long-term unemployment and worsened productivity scarring.Canada's long-standing ability to cushion labor market shocks may be less resilient in an environment where businesses are forced to make hard choices to survive, noted TD. AI adoption alone may not pose an immediate risk to the Canadian workforce, but when cost-saving technologies like AI collide with a downturn, firms may permanently change how work is done.As economic stress forces firms to make hard choices, some job losses may not reverse.Canadians are well educated and can face this challenge head-on and there is an opportunity for some workers to benefit from the moment. Policy needs to be precise to support reskilling dislocated workers and minimize outflows from the job market. The stakes are high and acting early will help to limit long-term labor market damage, according to the bank.

Canada's Parliamentary Budget Watchdog Trims Its 2026, 2027 GDP Growth Estimates and

Treating the current tariff environment as permanent, the Canadian Parliamentary Budget Officer (PBO) now projects real gross domestic product growth of 1.1% for this year and 1.6% in 2027, down from 1.3% and 1.8%, respectively, from its September 2025 outlook.The PBO noted its Economic and Fiscal Outlook for June 2026 assessed that the Canadian economy grew by 1.7% in 2025, "with a weakened outlook thereafter".After accounting for historical revisions, nominal GDP, the broadest measure of the government's tax base, is projected to be, on average, $19.5 billion higher annually over the 2026 to 2030 period compared with the outlook from September, due to stronger energy prices, said the PBO. PBO's status quo fiscal outlook includes the incremental measures announced in Budget 2025 and the Spring Economic Update 2026. Combined, these measures amount to $68.4 billion in (net) new spending over 2025-26 to 2030-31.PBO projects Canada's budgetary deficit to increase from $36.3 billion, or 1.2% of GDP, in 2024-25 to $72.0 billion, 2.2% of GDP, in 2025-26 as modest revenue growth is outpaced by growth in expenses -- largely reflecting the introduction of new measures.PBO projects budgetary deficits averaging $4.6 billion per year above the SEU 2026, reflecting lower revenues, particularly personal income tax, and higher program expenses, partially offset by lower public debt charges. It noted recent trends point to atypical growth paths for elderly benefits and children's benefits. PBO will pursue further analysis regarding both expense categories.Assuming no new measures are introduced and existing temporary measures sunset as scheduled, the budgetary deficit is projected to decline to $58.2 billion by 2030-31, as revenue growth outpaces growth in program expenses, partially offset by rising public debt charges, said PBO.Due to persistent budgetary deficits of on average 1.8% of GDP over the projection horizon, the federal debt-to-GDP ratio is seen rising from 41.3% in 2025 26 to 42.5% in 2030 31. Similar to PBO's September outlook, the federal debt-to-GDP ratio is projected to remain flat over the medium term, it added.

"Canada Must Spend More On Defence, Full Stop", says Scotiabank

"Canada must spend more on defence, full stop. A more polarized world and years of underinvestment leave the country exposed," Scotiabank said Thursday in a note entitled 'More than a Number: Canada's Defence Scale-Up Challenge in NATO's Next Frontier'.However, Canada isn't starting from zero, said Scotia, noting Canada has now met NATO's old 2% benchmark for direct defense spending and likely sits near the new defense-adjacent 1.5% threshold."Implementing what's been pledged is already ambitious," the bank added.The security perimeter has also widened materially. The Iran war reinforces that energy security, critical minerals, strategic infrastructure, and supply chains are now integral to defense, Scotia notes.NATO's new 5% target reflects this broader security landscape, but the 1.5% "bucket" should function as a floor for strategic investment, not a de facto ceiling, especially for countries with a comparative edge but inevitable competing national priorities, the bank said.A key policy question for Canada is where the next dollar goes, and how it will be financed. Those choices should be guided by pragmatism, absorption capacity, and comparative advantage, not mechanical target chasing, it added.According to Scotia, the real test is whether Canada's defense buildup, within a broader national investment push, builds domestic capability, productive capacity and resilience in ways that serve both national and allied security."Canada must scale core defense credibly while pressing for a NATO framework that better reflects comparative advantage and must eventually bring Canadians into the choices that would follow from a potentially even bigger price tag down the road," the bank said."Canada needs to get its own ramp-up right and help NATO get the framework right," it added.

Canada Has "Sclerotic" Demand and Supply Curve in The Economy, Says Rosenberg Research

Rosenberg Research said it remains amazed that the money market and some corners of Bay Street continue to believe the Bank of Canada will exercise its option from its recent statements and make the next move a rate hike.Rosenberg Research continues to bet against that view, as does the Canadian dollar (CAD or loonie), which has beaten a path back toward $1.39 after testing $1.3550 in early May -- and that is with a higher oil price.It's reflective of the state of the Canadian economy, which is close to being graded an "F" with back-to-back mild gross domestic product contractions and a technical recession also evident in productivity, which dipped by 0.5% at an annual rate in Q1 -- consensus was a 0.3% gain -- after receding 0.3% in Q4 of last year, stated Rosenberg.Outside of the Artificial Intelligence boom, there is absolutely zero vitality in the United States economy, but the situation in Canada is "far more dire," with pronounced weakness both on the demand and supply sides of the economy, added Rosenberg.

$CAD$CXY

Canada, U.S. Vehicle Sales Momentum "Vulnerable Through Rest of Year", says BMO

Canadian new vehicle sales came in at an estimated 184,000 units in May, with sales falling 1.7% year over year and extending the run of softer comparisons, notes Bank of Montreal (BMO)Hopes that volumes might finally clear 190,000 units, last achieved in May 2019, were again disappointed, despite May typically being the strongest sales month of the year, said the bank.United States light vehicle sales were more resilient, running near 16.2 million units annualized and up 3.1% year over year. While year-over-year comparisons continue to benefit from last spring's tariff-related pull-forward and subsequent payback, the underlying pace of demand has held steady, noted BMO.BMO's takeaway on consumer engagement: Canadian and American consumers "are still hanging on -- but only just". The bank said: "A key buffer remains wealth effects from historically high equity markets, which continue to support discretionary spending among higher-income households that dominate new-vehicle demand. However, elevated fuel prices are increasingly acting as a tax on consumption, siphoning billions of dollars away from discretionary categories like vehicle purchases."With fuel costs elevated and geopolitical risks mounting, any pullback in equity markets would further cloud the outlook, suggesting vehicle sales momentum remains vulnerable through the rest of the year, according to BMO.

Data in Canada Signals Early-Year Softness, But Underlying Momentum Is Stabilizing, Says Scotiabank

The Canadian economy hit a clear soft patch at the start of 2026, as confirmed by last week's gross domestic product, said Scotiabank.GDP was essentially flat in Q1, coming in below all expectations and pointing to softer underlying demand pressures, noted the bank. This aligns with earlier signals from the labor market, including weak hiring and a rise in unemployment at the start of the year.That said, the headline weakness should be interpreted with "caution," stated Scotiabank. The Q1 print was affected by several temporary factors that materially distorted the signal.Large swings in gold imports should be largely ignored, as should the sharp pullback in government spending, which is likely to reverse in Q2. Encouragingly, the flash estimate for April GDP already points to a meaningful rebound next quarter. Looking ahead, the bank continues to expect activity to firm, supported by fiscal spending and a recovery in export growth.While Scotiabank forecasts growth to average 0.8% in 2026, this headline figure masks a clear reacceleration in underlying momentum.Quarter-on-quarter growth should firm meaningfully as government spending reconnects with planned outlays and the lagged effects of past rate cuts continue to support domestic demand -- particularly in housing, it pointed out.External demand should also become more supportive over time. Export growth is expected to recover, although more convincingly into 2027 as the drag from tariffs fades.As a result, GDP growth is projected to rise to 2.1% in 2027. Taken together, this profile places growth above Scotiabank's estimate of potential -- 1.2% this year and 1.6% in 2027 --allowing the economy to gradually move back into balance by late 2027.Labor market dynamics are consistent with the broad activity narrative. While the unemployment rate has risen by 0.2 p.p. since the start of the year, this still marks an improvement relative to last summer. More importantly, the recent increase likely overstates underlying weakness, as a meaningful share reflects stronger labor force participation.With activity set to firm in the near term, labor demand should stabilize, allowing employment to gradually catch up with growth, added Scotiabank.Commodity prices provide an additional, although partial, tailwind. Elevated oil and non-energy commodity prices should improve Canada's terms of trade and modestly support investment and hiring. However, this support is being offset in part by tightening financial conditions, particularly tightening policy rates and rising long-term government bond yields.On inflation, the recent data has been more encouraging. Core measures have softened since the bank's March update, pointing to some easing in underlying pressures, in line with weaker demand earlier in the year. However, Scotiabank cautions against over-extrapolating this improvement.Pipeline pressures remain "significant." Elevated input costs, both energy and non-energy, are still expected to feed into final prices. The bank views inflation staying close to 3% for the remainder of the year, driven by energy prices, before falling back towards the Bank of Canada target as energy prices normalize.At the same time, geopolitical risks remain elevated and could further disrupt pricing dynamics. In this environment, upside risks to inflation remain material, and Scotiabank estimates the BoC to remain focused on persistence.