Morning Money | Weekly Recap

The biggest Canadian story this week was a sharp turn in the labour
market. Canada lost 68,300 jobs in September, following another
decline in August, while the unemployment rate rose to 6.5%. That
matters because a weaker job market can slow consumer spending and
makes the Bank of Canada’s next rate decision more complicated,
especially with inflation pressure from oil and tariffs still hanging
around.

Canada also posted a surprisingly large $4.2-billion trade surplus in
August, but much of the strength came from exporters rushing goods
into the U.S. before new tariffs took effect. In other words, the
headline was strong, but it may not tell us much about what trade
looks like from here.

Markets this week:

• The TSX had a rough midweek selloff, dropping 1.7% on Wednesday —
its biggest one-day decline in four months — as higher bond yields hit
financials and mining stocks.
• U.S. markets still managed to reach fresh records earlier in the
week, powered largely by big technology and AI names.
• Bond yields remained the pressure point. The U.S. 10-year Treasury
yield climbed above 5.3% during the week, keeping borrowing-cost and
valuation concerns front and centre.
• Oil stayed volatile as Middle East tensions continued, but prices
eased Friday on hopes for a pause in the fighting.
• The Canadian dollar weakened after this morning’s jobs report as
investors reassessed the outlook for Canadian interest rates.

Next week: U.S. inflation data on Wednesday and the start of
major-bank earnings will be the biggest global market tests. In
Canada, watch the reaction to today’s weak jobs report and whether it
changes expectations for the Bank of Canada’s October 28 meeting.