Morning Market Brief December 30, 2024

A look at Canada’s key manufacturing sector

2025 is quickly approaching and with it new expectations for financial markets and the economy. There is much to monitor in the early part of the year, including central bank actions and potential US tariffs. It will be a short week for financial markets with the New Year’s holiday on Wednesday. Still, there will be several important economic announcements to monitor. Here is what to watch for this week.

• Bloomberg Nanos will release Canada’s consumer confidence today for the week ended December 27. Consumer confidence has dropped for eight straight weeks despite the Bank of Canada lowering interest rates. Concerns about Canada’s economy and the real estate market persist.
• A peak into Canada’s manufacturing sector in December will be released on Thursday. Canada’s manufacturing sector has expanded for three straight months as of November, boosted by higher new orders.
• South of the border, pending home sales will be announced today. Home sales in the US have risen for three straight months. Also on the docket will be a release of US manufacturing activity on Thursday and services sector activity on Friday.
• Around the world, China’s manufacturing activity will be released tonight, Europe’s manufacturing activity and bank loans on Thursday, and Germany’s unemployment rate on Friday.

A reminder that equity and bond markets in Canada and the US will be closed on Wednesday. Global equity markets have seen relatively strong gains in 2024 due in part to easing monetary policy. Central banks could keep lowering interest rates, which could provide a further boost to financial markets. However, it’ll be important to monitor how potential tariffs impact central bank actions and the global economy as we enter 2025.

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