Market News: Week Ending August 7, 2026

Market News: Week Ending August 7, 2026

Statistics Canada announced that, in June, Canada's merchandise exports increased 0.4% while imports edged 0.2% higher. As a result, Canada's merchandise trade balance with the world rose to a surplus of $3.9 billion from a revised $3.7 billion in May (previously reported as $4.2 billion). Exports to the United States rose 0.3% in June, a fifth consecutive monthly increase. Meanwhile, imports from the United States jumped 3.0% in May. As a result, Canada's trade surplus with the United States narrowed from $11.1 billion in May to $10.0 billion in June. StatsCan simultaneously released the services trade results and a deficit of $0.3 billion was recorded in June. It is widely expected that these figures will continue to fluctuate as international trade remains unsettled. The combined, total trade surplus will be a positive sign for overall GDP growth in the second quarter.  

The U.S. Census Bureau announced that the country's international trade deficit in goods and services stood at $73.3 billion in June, narrower than the $77.6 billion gap for May. June exports were $314.7 billion, $2.9 billion less than May exports. June imports were $388.0 billion, $7.3 billion less than May imports. A narrower trade deficit was anticipated and the report is in line with market expectations. 

The U.S. Bureau of Labor Statistics announced that non-farm labour productivity expanded by 1.4% (annualized) during the second quarter of 2026, establishing another new high. This follows an upwardly revised 0.8% advance (on the same basis) in the first quarter. During the second quarter of 2026, unit labour costs rose 1.3% (annualized). These results are stronger than market expectations, and they paint a stark picture when compared to Canada’s extended decline in productivity. Productivity growth is a key competitive advantage. It is important for longer-term economic stability as it allows for a higher standard of living with both higher wages and faster economic growth, all without added inflationary pressures. 

The U.S. Department of Labor announced that initial jobless claims totalled 199,000 (seasonally adjusted) in the week ending August 1, an increase of 1,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 197,000 to 198,000. The 4-week moving average was 198,750, a decrease of 4,500 from the previous week's revised average. The previous week's average was revised up by 500 from 202,750 to 203,250. These results are somewhat stronger than market estimates. 

The U.S. Bureau of Labor Statistics announced that the unemployment rate edged down from 4.2% to 4.1% in July. At the same time, non-farm payrolls were reported as declining by 23,000 during the month, reversing the revised 20,000 gain recorded for June (originally reported as +57,000). This was the first decline in payrolls since February (-92,000). During July, average hourly earnings climbed 0.1% to stand with a year-over-year advance of 3.2%; slightly below headline inflation (3.5% in June). This report was weaker than consensus estimates. Coupled with the recent easing of inflation, this will prompt further market debate on the future direction of Fed policy given the current ‘on hold’ position. The next meeting is scheduled for September 15 and 16. This is the most closely followed set of U.S. statistics as it indicates the relative health of the various sectors of the economy and is suggestive of consumer spending.

Statistics Canada announced that overall employment rose by 75,000 in July. The recent gains have erased the large losses seen earlier in 2026 and the cumulative jobs gains thus far in 2025 now stands at 68,800. At the same time, the overall unemployment rate edged lower to 6.4%, as the labour force reported a similar increase (60,500). The July results lifted the overall annual rate of job growth to 1.2%. Another increase in the population (15,400) left the participation rate (the percentage of working age individuals who were either working or looking for work) at 65.1%, further above the cyclical low (64.9% March 2026) but far below the pre-pandemic peak of 67.3%. This indicates that as the population has surged, there are now 759,000 potential workers still on the sidelines compared to 95,000 at the end of 2010. A return to 67.3% participation would produce a more realistic unemployment rate of 9.6% - consistent with the ongoing recession. The headline results were stronger than market expectations. The strengthening job market and stubbornly high inflation (2.8%) will leave the Bank of Canada with little leeway as they approach their next policy announcement, scheduled for September 2.

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.