(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

What happened last week?

• The rally for equities during the second half of last week erased early losses.  U.S. equities fared better than Canada’s TSX, which lost ¼ percent.

• The Bank of Canada released a Summary of Governing Council Deliberations leading to its monetary policy announcement of April 12th.  The major factors contributing to the decision to hold rates steady are the international economy, and domestic economic developments and the outlook for inflation.  The summary provides insight to both the process of the Bank’s analysis and the depth.  It also highlights that these decisions cannot be based solely on the situation in Canada, and the U.S. is a major influence. 

• Two key economic indicators were released last week in the U.S., Gross Domestic Product (GDP) and Personal Consumption Expenditures (PCE) price index.  Total economic output, GDP, grew at an annualized rate of 1.1% for the first quarter of 2023, which is below most estimates.  GDP grew at a rate of 2.6% in the final quarter of 2022, and the 2.1% for all of 2022. 

• PCE, which is the Federal Reserve’s preferred indicator for inflation rose 4.2% in March, down from February’s 5.1%.  The current period exceeded estimates of 3.7%.

Source: Governing Council Deliberations

What’s ahead for this week?

• In Canada, March’s imports, exports and trade balance, and a number of Purchasing Managers Indexes for April will be reported.  On Friday the jobs report for April will be released, which will show employment, unemployment, wages for the most recent period.

• In the U.S., construction spending, durable goods production, factory orders, trade balance, and an extensive array of Purchasing Managers Indexes are scheduled.  The most important announcement for the week will occur on Wednesday afternoon when the Federal Reserve releases its monetary policy announcement.

• Globally, many markets will be closed on Monday for Labour Day (also known as May Day).  Eurozone consumer inflation will be released on Tuesday, along with several individual nation’s inflation numbers.  Employment data for the Eurozone will also be announced, which will be followed by a European Central Bank interest rate announcement. 

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