BMO on The Day Ahead in Canada

07:53 AM EST, 01/16/2026 (MT Newswires) -- Canada's data run isn't that encouraging this week, with housing remaining soft in December, while manufacturing and wholesale volumes were weak in November, said Bank of Montreal (BMO).

Emphasizing the first theme is an expected decline in December housing starts at 8:15 a.m. ET on Friday, noted the bank. The November international securities transactions will be released at 8:30 a.m. ET, also on Friday.

According to BMO, Canadian Prime Minister Mark Carney's meeting with Chinese President Xi Jinping this week appeared to have been fruitful, with the 'fruits' being some specific commitments by both countries:

-- A new tariff-rate quota for Chinese electric vehicles (EV): up to 49,000 can be imported to Canada at a 6.1% rate. The current 100% levy has been in place since 2024; in 2023, Canada imported just under 42,000 units.

-- China's higher tariffs on some Canadian agriculture and seafood products will be lowered from March 1 to at least the end of the year. That includes canola seed -- from a combined 84% tariff to 15% -- canola meal, lobsters, crabs and peas.

-- Other agreements included removing visa requirements for Canadian travellers to China and a new working group to collaborate on food safety. There were promises of more cooperation, including scope for greater trade and investment.

It remains to be seen if/how United States President Donald Trump responds to these developments, stated the bank. Canada's 100% tariff on Chinese EVs was imposed to match the U.S. levy.

However, in recent months, U.S.-China relations have thawed while negotiations with Canada were unceremoniously cancelled.

For now, the Canadian dollar (CAD or loonie) is a touch stronger at $1.389 (72 cents US), added BMO.

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