Market News: Week Ending May 1, 2026

Market News– Week Ending May 1, 2026

The Bank of Canada announced that it was holding administered interest rates steady once more at the conclusion of its latest monetary policy meeting. The announcement leaves the target range for overnight borrowing at 2.25% to 2.50% with the official, benchmark Bank Rate at 2.50%. The Bank also maintained the official Deposit Rate at 2.20%. This is the fourth consecutive “on hold” announcement and leaves administered interest rates at their lowest level since July 12, 2022. Rate cuts between June 2024 and October 2025 resulted in a total reduction of 275 basis points (a basis point is 1/100th of one per cent). The Bank statement highlighted the recent weakness in the job market and an expected rise in inflation.  “The unemployment rate remains in the 6½%‑7% range, reflecting both weak hiring and fewer job seekers. CPI inflation will likely rise further in April to about 3%.”  Considerable uncertainty remains, fueled by both the conflict in the Middle East and broader changes in international trading patterns. The market will likely remain cautious in setting its expectations for the next policy announcement scheduled for June 10, 2026. 

Following its two-day monetary policy meeting, the U.S. Federal Reserve (Fed) held interest rates steady, leaving the target for the federal funds rate in the rage of 3.50% to 3.75%. This is the third “on hold” result following six interest rate cuts during the current easing cycle. Administered rates remain at their lowest level since November 1, 2022, following a total reduction of 175 basis points (a basis point is 1/100th of one per cent). This easing of monetary policy follows cumulative rate hikes totalling 525 basis points between March 16, 2022 and July 26, 2023, which was the most aggressive tightening since the 1977 to 1980 period. Importantly, the Fed statement contained the text “Inflation is elevated, in part reflecting the recent increase in global energy prices.” This suggests that the Fed remains more focused on inflation than on unemployment, at this juncture. The Fed’s inflation target is 2.0% and annual growth of the consumer price index stood at 3.3% in March. The “no move” result was the anticipated outcome, and the market will now begin evaluating the most likely scenario for the next policy meeting, scheduled for June 16 and 17. 

Statistics Canada announced that, on a monthly basis, real gross domestic product (GDP) by industry expanded by 0.2% in February. The current data release contained yet another set of revisions going back to January 2025 (generally upward revisions). The February figure matched than the forecast for a 0.2% gain that was provided as forward guidance by the statistics agency in the previous data release. On a year-over-year basis, GDP growth stood with a marginal 1.0% advance. At the same time, GDP per-capita (working aged individuals) posted a 0.1% expansion during the month, but annual growth on a per-capita basis remained in negative territory (less than -0.1% year-over-year). Once again, Statistics Canada provided forward guidance, stating that “advance information indicates that real GDP was unchanged in March.” If this proves to be accurate it suggests that the economy expanded 1.7% (annualized) in the first quarter of 2026, following the 0.6% contraction in Q4/2025. 

The U.S. Bureau of Economic Analysis announced that real gross domestic product (GDP) grew by 2.0% (q/q annualized) in the first quarter of 2026. This is the “advance estimate” prepared with preliminary data and is often subject to substantial revision. In the final quarter of 2025, real GDP expanded by 0.5% (on the same basis) as the shutdown of the Federal Government provided a significant dampening influence. The contributors to the increase in real GDP in the first quarter were investment, exports, consumer spending, and government spending. Imports, which are a subtraction in the calculation of GDP, also increased. These results are in line with market expectations and continue to suggest that the U.S. remains on solid economic growth path. 

The U.S. Department of Labor announced that initial jobless claims totalled 189,000 (seasonally adjusted) in the week ending April 25, a decrease of 26,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 214,000 to 215,000. The 4-week moving average was 207,500, a decrease of 3,500 from the previous week's revised average. The previous week's average was revised up by 250 from 210,750 to 211,000. These results are stronger than market estimates. 

Regards,

Glenn

Note:
All index performance is in Canadian dollars.

IMPORTANT DISCLAIMERS
The information in this letter is derived from various sources, including CI Global Asset Management, CRA, Bloomberg, National Post, Globe and Mail, Wall Street Journal, Bloomberg, Reuters, Investment Executive, Advisor.ca, MarketWatch, Toronto Sun, The Guardian, MSN.ca and Statistics Canada at various dates. This material is provided for general information and is subject to change without notice. Before acting on any of the above, please contact me for individual financial advice based on your personal circumstances. Certain statements contained in this communication are based in whole or in part on information provided by third parties and CI Global Asset Management has taken reasonable steps to ensure their accuracy. Market conditions may change which may impact the information contained in this document.