Morning Money | Monday, October 19

CANADA’S INFLATION TEST TAKES CENTRE STAGE

Canada’s September inflation report is landing this morning, with economists expecting the annual rate to rise to about 3.2% from 3.0%. Bank of Canada Governor Tiff Macklem said over the weekend that the Bank will significantly raise its inflation forecast because oil and fuel prices have stayed high.

Why it matters: this is the final major inflation reading before the Bank of Canada’s October 28 rate decision. A broad increase beyond gasoline could raise the odds of another rate hike and keep mortgage costs elevated. A softer reading would give the Bank more room to focus on Canada’s weakening job market.

MARKETS THIS MORNING

• TSX futures slipped about 0.2% as oil pulled back from last week’s highs.
• S&P 500 futures gained roughly 0.5% and Nasdaq futures rose about 1%, while Dow futures were slightly lower.
• The U.S. 10-year Treasury yield eased toward 5.08%, helping rate-sensitive stocks.
• Brent crude fell roughly 1%–2% to around US$108 a barrel after the U.S. signalled possible relief from some Russian oil sanctions.
• China’s economy grew 4.5% in the third quarter, slightly ahead of expectations, although weak household demand and the property slump remain concerns.

AI STOCKS TRY TO REBOUND

Technology shares are recovering after last week’s sharp selloff. CoreWeave, Broadcom, Micron and Nvidia all rose before the bell. The real test comes from earnings: Meta, Tesla, Netflix, Texas Instruments and other major companies report this week, with investors demanding clearer evidence that massive AI spending can generate sustainable profits and cash flow.

WHAT TO WATCH

The Bank of Canada releases its quarterly surveys of businesses and consumers at 11:30 a.m. ET. Watch whether companies plan to pass higher fuel and supply-chain costs to customers, and whether households expect inflation to stay high. Those expectations could matter almost as much as today’s CPI figure.