Good morning. In focus this week: A Canadian company provides a unique lens on the direction of artificial intelligence, central banks are expected to act decisively on holding still, and uncertainty becomes normalized.
Up first
In the news
Federal government: Prime Minister Mark Carney will announce this morning plans to create a sovereign wealth fund, a day ahead of the spring economic statement, The Globe is reporting.
Washington shooting: U.S. officials are examining how a gunman was able to storm a dinner attended by U.S. President Donald Trump, who has already drawn heightened security after surviving two assassination attempts.
Ridesharing: Ontario is allowing rideshare apps in northern parts of the province, angering local taxi companies.
Donald Trump visited the construction site at the Federal Reserve building last July to publicly scold Jerome Powell, accusing him of wasting money.Kent Nishimura/Reuters
In focus
Strap on your helmets
A Canadian lens on AI’s path: “To understand the uncertainty around artificial-intelligence spending,” reporters Joe Castaldo and Sean Silcoff wrote in January, “look no further than Celestica Inc.”
The Canadian company’s results offer a less-abstract measure of hyperscaler spending through demand for its networking switches and data-centre gear. But its stock has come to trade more like a barometer of investor conviction in the broader AI buildout.
Even after the country’s third-largest tech company blew past analyst expectations at the beginning of the year, its share price closed the day down more than 10 per cent. That had more to do with investor anxiety about whether record spending on AI infrastructure was sustainable.
Almost four months on, Celestica’s shares have climbed more than 40 per cent, and a rally in chipmaking stocks has reinforced a fresh wave of optimism across AI shares.
The company’s earnings after market close today – arriving the same week as results from Microsoft, Alphabet, Amazon, Meta Platforms and Apple – will offer a window into how much of that optimism is supported by actual on-the-ground spending. But the fate of its stock, as my colleagues observed in their koan-like way, will likely reflect much larger forces at play.
A big week on Bay
Those five tech giants are headlining a weighty week of quarterly results south of the border. But news‑making companies across key Canadian sectors are also filling the week’s earnings calendar. GFL Environmental will face questions about its recent acquisition of SECURE Waste Infrastructure. Air Canada is paying higher prices for jet fuel because of the war in Iran but has passed along costs to travellers.
- Monday: Celestica; TFI International.
- Tuesday: Aecon Group; Toromont Industries; Winpak.
- Wednesday: Canadian National Railway; Canadian Pacific Kansas City; Brookfield Infrastructure Partners; CGI; GFL Environmental; Methanex; West Fraser Timber; Whitecap Resources.
- Thursday: Air Canada, Agnico Eagle Mines; Bombardier; AltaGas; Gildan Activewear.
- Friday: Fairfax Financial Holdings; TC Energy; Imperial Oil; Magna International; Brookfield Renewable Partners.
For a full list of earnings and economic events, you can find our calendar here.
Hold, please
🇨🇦 Tiff Macklem is expected to hold the Bank of Canada’s benchmark lending rate at 2.25 per cent for the fourth-straight meeting on Wednesday. But holding steady is a decision, too, reflecting how the bank is weighing a volatile economic backdrop – and putting added focus on Macklem’s remarks for clues about where rates go next.
Monetary policy isn’t designed to deal with trade wars and oil shocks that shift from one decision to the next, never mind by the day. It can take two years for cuts or rises to wend their way through the economy.
“There is nothing that BoC interest-rate policy can do to influence the global price of oil,” Royal Bank of Canada economists wrote to clients on Friday.
The central bank governor has said that the bank will “look through” the immediate spike in inflation caused by higher gasoline prices, but the governing council is “ready to respond” if the energy shock caused by the Iran war starts feeding into broader goods and services prices, Macklem said at the bank’s past rate announcement.
Despite rising fuel prices, March inflation was 2.4 per cent, which is within range of the bank’s 1- to 3-per-cent target. Unless the bank sees widening and persistent signs of inflation, it isn’t likely to budge.
🇺🇸 In what is most likely Jerome Powell’s last decision as head of the U.S. Federal Reserve, the Trump appointee-turned-nemesis is also expected to hold the central bank’s lending rate steady.
In commentary after the rate announcements from both Macklem and Powell, investors will be looking for updates in language that tip their hands on their longer-term outlook. Markets in Canada are expecting no changes to the lending rate in 2026, while U.S. investors are still leaning toward at least one cut.
Kevin Warsh, the Trump nominee to replace Powell, had his path cleared on Friday when the administration dropped its criminal probe into the outgoing chairman. A key Republican senator was vowing to block the confirmation until the investigation was scrapped, citing concerns over the Fed’s independence.
Waiting on the war to change: Central banks have spent years reminding us that expectations can normalize even when risks don’t disappear.
That may also explain why this is the first Monday in weeks when the war in Iran hasn’t led this newsletter. That’s not to say developments overseas are any less likely to shape markets or economic outlooks. The U.S. said it has seen progress from the Iranian side in recent days and hoped more would be made in a weekend visit to Islamabad by envoys Steve Witkoff and Jared Kushner, but Trump called off that mission on Saturday. “If they want, we can talk but we’re not sending people,” Trump told Fox News yesterday. He said earlier on social media: “All they have to do is call!!!”
But as the conflict drags on, and sudden hopes of an accord have been dashed just as quickly, the uncertainty that once drove unpredictability is becoming one of the only things we can count on. Normal, even.
Around the world: Central‑bank decisions dominate the week – the European Central Bank, Bank of England and Bank of Japan are all expected to hold interest rates steady. In the U.S., attention turns tomorrow to the Conference Board’s Consumer Confidence Index for April, a key read on household sentiment. On Thursday, Canada reports (likely modest) economic growth for February.
Charted
Provinces under pressure
Under pressure to support their economies against tariffs and geopolitical shocks, provincial governments face tightening fiscal room and mounting debt burdens that could restrict their room to manoeuvre.
Quoted
Romance is truly driving the book world.
— Kaitlynd Carmichael, romance category manager at Indigo
Meet the business-savvy swoon-sellers of the Great Hot North.
Morning update
Global markets were steady at the start of a busy week of tech earnings reports and central bank decisions. But investors took notice of an Axios report that said Iran proposed reopening the Strait of Hormuz, while postponing nuclear negotiations.
Wall Street futures were mixed, while TSX futures pointed lower.
Overseas, the pan-European STOXX 600 was up 0.26 per cent in morning trading. Britain’s FTSE 100 climbed 0.14 per cent, Germany’s DAX advanced 0.62 per cent and France’s CAC 40 rose 0.4 per cent.
In Asia, Japan’s Nikkei closed 1.38 per cent higher, while Hong Kong’s Hang Seng slipped 0.2 per cent.
The Canadian dollar traded at 73.46 U.S. cents.