BOJ Governor Ueda Warns Oil Price Shock Could Trigger Persistent Inflation 
ECB Warns Euro Zone Inflation Will Keep Rising Despite Strait of Hormuz Reopening 
RBA Raises Interest Rates to 4.35% Amid Rising Inflation Risks and Middle East Tensions 
RBA Rate Hike Outlook: Impact on AUD/USD and ASX 200 
Senegal Appoints Economist Ahmadou Al Aminou Lo as Prime Minister Amid IMF Debt Crisis 
ECB Signals Possible Rate Hike as Iran Conflict Fuels Inflation Concerns 
BOJ Rate Hike Expectations Grow as Board Member Signals Hawkish Stance 
Bank of Korea Signals Potential Interest Rate Hikes as Inflation Remains Elevated 
Fed Signals Possible Rate Hikes if Inflation Remains High in 2026 
Market attention will focus on the BoC meeting this Wednesday. The effects of low oil prices are still being felt on the economy, which officially slid into recession in Q2. Despite decent behavior of consumption and a still-resilient labor market, which will likely be highlighted by the BoC, there are significant downside risks to economic activity.
Continued weakness in the energy sector has depressed investment, which is expected to remain subdued for the rest of the year. Weakness in the price of commodities is expected as nervousness about China dominates the price action.
Canadian oil producers face very high extraction costs, and tight margins due to low oil prices will likely continue to slow capital expenditure, hurting aggregate investment even further.
The BoC will likely highlight the brighter side of the picture, and we expect it to keep its overnight lending rate unchanged at 0.5% (consensus: 0.5%).
With no other major data releases, the looney should remain range-bound, with downside risks due to oil price movements and concerns about the global outlook.
