Economic Calendar
Trump’s Tariff Warning Adds Uncertainty as Canada’s Job Market Cools
Last night, US President Trump warned that it would be “devastating” if the Supreme Court rules against his tariffs, stressing that tariffs remain a central pillar of his economic strategy. He clarified that there are no new tariff announcements for now, but if the court decision goes against him, his team would need to develop a “game two plan”—alternative measures to support US industries, though he acknowledged these would take longer to implement.
For financial markets, Trump’s remarks underscore renewed uncertainty surrounding his trade policy. If the Supreme Court ultimately strikes down or limits his authority to impose tariffs, it could ease inflation pressures and improve global trade sentiment, leading to mild weakness in the US dollar as traders price in lower inflation risks and potentially a less aggressive Federal Reserve stance. Conversely, if the tariffs are upheld, the USD could remain supported by expectations of continued protectionist policies that may sustain inflation and keep interest rate expectations higher for longer.
Meanwhile, attention turns to today’s Canadian labour market data, which are expected to show slight weakness compared to last month. Such an outcome would signal that Canada’s job market is entering a mild cooling phase rather than a sharp downturn. A stable unemployment rate alongside a small decline in employment would suggest that the labour force itself may have also contracted, as some individuals step out of active job searching.
Economically, this would be consistent with the broader trend of a gradual slowdown despite recent monetary easing. Although the Bank of Canada has been cutting interest rates since mid-2024 to support growth, the delayed effects of earlier rate hikes are still being felt. Households and businesses remain under pressure from past borrowing costs, particularly in housing, construction, and consumer-focused sectors. Companies remain cautious about expansion and hiring until demand strengthens more convincingly. By contrast, service industries such as healthcare, education, and public administration continue to show resilience, preventing a steeper drop in overall employment.
From a market standpoint, investors would likely interpret this data as confirmation that Canada’s economic momentum is fading. A flat or slightly negative employment print, coupled with a jobless rate above seven percent, would reinforce the view that the labour market is loosening, reducing wage and inflation pressures. Such an outcome would likely weigh on the Canadian dollar, particularly against the dollar, as traders anticipate a more dovish tone from the Bank of Canada in the coming months. Weaker employment figures typically strengthen expectations of further policy easing, especially as policymakers balance supporting growth against still-moderating inflation.
Analysis by Coach Angel, RoboAcademy
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