National Bank On What It Will Be Watching For Next Week

03:39 PM EDT, 09/12/2025 (MT Newswires) -- In Canada, the main event will be the Bank of Canada's monetary policy meeting on Wednesday.

National Bank said the central bank is expected to lower its policy rate by 25 basis points in what would be the first rate cut since March, when Canada-U.S. trade uncertainty was at its apex. It noted while economic data had held up better than was expected earlier this year, recent developments in the labour market are signalling the need for greater monetary policy support, while a softer-than-expected GDP report also drove markets to discount a higher cut probability. It also noted inflation is still "somewhat" above target, but the July report offered some encouraging signs that pressures are waning. "Technically, the BoC will have one additional look at inflation before they make their rate decision, but we don't think that report is likely to derail a cut. Markets see things similarly as implied cut odds have hovered between 80% and 90% after the latest jobs report."

National Bank noted while the decision will not come with an updated Monetary Policy Report, the Governor and Senior Deputy Governor will hold a press conference after the decision.

The other important release will be the Consumer Price Index data for August, on Tuesday. National Bank said despite the increase in gasoline prices, the headline index may have remained stable during the month (not seasonally adjusted). If so, the annual inflation rate could rise by two tenths of a percentage point, reaching 1.9%. Looking at the Bank of Canada's core measures, National said both the CPI-med and CPI-trim could have remained stable at 3.1% and 3.0%, respectively, on an annual basis.

Next Friday's July retail sales report will also be closely watched. Judging by the auto sales data released earlier, motor vehicle and parts dealers may have contributed positively to the headline figure, National Bank said. However, the bank added, this was likely offset by a decline in spending in several other segments, resulting in a 0.8% drop in headline goods spending. It also noted ex-auto outlays may have been even weaker, contracting by 1.2%, led by a decrease in gasoline station receipts.

The week will also feature the release on Monday of July manufacturing sales. National Bank said it may have expanded 1.8% m/m on gains in petroleum/coal products and transportation equipment subsectors.

An update on the residential sector will also be provided with the release on Tuesday of housing starts data for August. Judging by the residential permits data released so far, the latter may have eased back to 280K in the month (seasonally adjusted and annualized), led by a decrease in the multifamily segment, National Bank said.

Meanwhile, National said existing home sales on Monday could have increased by 0.6% in August, as small declines in Toronto and Calgary were likely more than offset by gains in Vancouver and Montreal.

National Bank will also keep an eye on July wholesale trade sale data and the release of the September CFIB Business Barometer.

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