Bank of Canada survey shows sentiment improving, but expectations remain soft

Joshua Gibson FXStreet

The Bank of Canada's (BoC) latest sentiment survey of Canadian businesses revealed that while firms are experiencing a general uptick in forward-looking sentiment, a lot of them are still feeling a growth crunch at the hands of tariffs from the US that are discouraging active trade.

Key highlights

Q3 Business Outlook Survey shows overall intentions remain subdued despite gradual improvement in sentiment.
Q3 Business Service Indicator -2.28 versus -2.40 in Q2.
Expectations for growth in domestic and exports sales remain soft amid trade tensions.
Balance of opinion on indicators of future sales is 0.0, up from -6.0 in Q2.
27% of firms reported outright decline in sales over previous 12 months, up from 24% in Q2.
18% of firms expect inflation to be above 3% for next two years, down from 23% in Q2.
33% of firms expect Canada to be in a recession over the next year, up from 28% in Q2.
35% of firms expect lower labor costs over next 12 months, 14% see higher labor costs.
BoC Q3 Survey of Consumers for next 12 months shows 64.1% of Canadians expect a recession, down from 64.4% in Q2.
BoC Consumer Survey shows expectations for 5-year inflation have risen to 3.67% from 3.45% in Q2.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

GBP/USD remains depressed below 1.3400 amid escalating US-Iran tensions

The GBP/USD pair finds some support near 1.3370 after a modest gap-down opening, though it lacks bullish conviction and remains below 1.3400. Nevertheless, spot prices, for now, seem to have stalled the pullback from a nearly four-week high, around the 1.3450 area, touched on Friday amid mixed fundamental cues.

EUR/USD: Flag breakdown supports more downside towards 1.1325

The Euro holds opening losses at around 1.1390 against the US Dollar during the mid-Asian trading session on Monday. The major currency pair faces selling pressure as the US Dollar starts the week on a strong note due to an increase in the appeal of safe-haven assets.

Gold seems vulnerable amid Iran risks reviving inflation fears, Fed hike bets

Gold maintains its offered tone through the Asian session, and currently trades just above $4,050, down nearly 1.40% for the day. A further escalation of tensions between the US and Iran, along with the closure of the Strait of Hormuz, lifts crude oil prices and revives inflation fears. This, in turn, bolsters expectations of higher interest rates by the US Federal Reserve, which benefits the safe-haven US Dollar, and drives flows away from the bullion.

Cardano: Ongoing whale accumulation fails to halt downward correction

Cardano (ADA) extends its losses, trading below $$0.160 after falling over 14% in the previous week. Despite on-chain data showing continued accumulation by whales, the buying activity has failed to lift prices. Meanwhile, bearish derivatives metrics and a weakening technical outlook indicate further downside for ADA.

Week ahead – US CPI and Warsh testimony to take centre stage, BoC eyed too

It’s been more than a month since Kevin Warsh took over as head of the Federal Reserve but after one FOMC meeting and two public appearances later, investors are still trying to gauge where the new chair sits on the dove-hawk scale.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.