FINANCIAL NEWS TODAY

🇨🇦 1. TSX Futures Flat as Investors Await U.S. Jobs Report

The S&P/TSX Composite Index futures traded flat ahead of the July 4 U.S. holiday, as Canadian investors remained cautious. Markets await the release of U.S. Non-Farm Payrolls, which could influence global risk appetite and currency flows.

While the TSX recently approached record highs, downward pressure from declining gold and oil prices has capped gains. Still, strength in the energy and financial sectors continues to support Canadian equities. Market analysts anticipate that U.S. economic data and potential Fed policy shifts will set the tone for the TSX in July.

📉 2. Canada’s Trade Deficit Narrows in May

Canada’s trade deficit shrank to C$5.9 billion in May, down from C$7.6 billion in April, according to Statistics Canada. Exports rose 1.1%, driven by higher shipments of agricultural products, industrial machinery, and pharmaceuticals. Imports dropped 1.6%, largely due to lower consumer goods and electronics purchases.

Exports to the United States declined, pulling the bilateral trade surplus to a 25-year low. However, rising exports to Europe and Asia helped offset that decline, highlighting Canada's efforts to diversify trade partners amid global uncertainty.

💵 3. Canadian Dollar Gains Amid U.S. Rate Speculation

The Canadian dollar (CAD) appreciated to about 1.3595 per USD, supported by expectations that weaker U.S. job data could prompt the Federal Reserve to cut rates sooner than previously projected.

In addition, oil prices rose moderately, supporting the loonie given Canada’s status as a major energy exporter. Some analysts believe that if CAD breaks below 1.3550, it could rally toward 1.34 in the coming weeks. Currency volatility is expected to remain high pending global economic data releases.

🪙 4. Agnico Eagle Mines Surges 51% in 2025

Gold mining giant Agnico Eagle Mines (AEM) has seen its share price climb 51% year-to-date, outperforming most of the TSX. The stock benefited from strong quarterly results, rising gold prices, and promising exploration results in Quebec and Nunavut.

With a robust balance sheet, strong free cash flow, and consistent production growth, AEM is now rated a “strong buy” by multiple institutions. If gold continues trading above $2,100/oz, analysts expect Agnico Eagle to maintain its upward trajectory through year-end.

🏛️ 5. Canada Moves to Dismantle Interprovincial Trade Barriers

The Canadian government has introduced a sweeping reform package to eliminate interprovincial trade restrictions, which currently cost the economy billions annually in inefficiencies and compliance costs.

The proposed “One Canadian Economy” bill seeks to streamline regulations across provinces and territories, allowing companies to freely move goods and services nationwide. The legislation is expected to pass by August 2025, and economists estimate it could boost Canada's GDP by 1–2% over five years.

🤝 6. Canada–U.S. Trade Talks Resume After Digital Tax Withdrawal

Following the repeal of its 3% digital services tax, Canada resumed stalled trade talks with the United States. The move followed threats of retaliatory tariffs from the Trump administration, which had frozen bilateral negotiations for weeks.

Talks are now focused on resolving issues around rules of origin, digital commerce, data protection, and agriculture. The two countries have set a July 21 deadline to finalize a new framework, which could ease uncertainty for exporters and foreign investors alike.

📉 7. Canada Cancels Digital Services Tax to Avoid Tariffs

In a major concession, the Canadian government canceled its planned digital services tax, which had targeted U.S. tech giants like Amazon, Google, and Meta. The tax, intended to raise domestic revenue, risked triggering over $12 billion in retaliatory tariffs from Washington.

The decision was welcomed by the tech sector and international trade observers. It paved the way for the revival of diplomatic and commercial ties, showing that Canada is willing to prioritize economic stability over isolated fiscal gains.

⚠️ 8. Bank of Canada Flags Trade Risks in Financial Stability Report

The Bank of Canada (BoC) warned in its latest financial stability report that persistent trade conflicts and global economic uncertainty could pose systemic risks to the country’s financial system.

Key concerns outlined by the BoC include:

High household debt levels vulnerable to rising interest rates.

Liquidity risk in corporate bond markets.

Export dependence on the U.S., especially in sectors facing new tariffs.

The BoC maintained its benchmark interest rate at 4.50% but emphasized it is prepared to act if external shocks threaten Canada’s financial integrity.

📉 9. TSX Ends Lower After Canada Day, Tech Sector Lags

After the July 1st Canada Day holiday, the TSX closed down 0.3%, with mixed performance across sectors. Materials, health care, and energy posted modest gains, while technology and industrials underperformed.

Market volatility was driven by profit-taking in high-growth stocks and a shift toward dividend-paying defensive stocks. Bond yields also climbed, with the Canadian 10-year government bond rising to 3.62%, suggesting inflation concerns may persist through Q3.

📈 10. BMO Sees Canada’s Economy Rebounding in 2025

BMO Capital Markets released a report forecasting a Canadian economic recovery beginning in the second half of 2025. The bank expects real GDP growth of 2.2%, driven by improving consumer sentiment, controlled inflation, and increased public infrastructure spending.

Additional contributing factors:

Stabilized interest rates

Healthier labor market

Declining inflation, projected to stay near 2.5%

Enhanced trade relationships post-tax reform

This outlook marks a turnaround from the sluggish performance seen in 2023–2024, with analysts now expressing renewed confidence in Canada’s mid-term economic prospects.