Macro Pulse — May 06 to May 12, 2026

• POW.TO WATCH POW.TO 2026-05-12 00:00:00 EPS est. 1.41
• PEY.TO WATCH PEY.TO 2026-05-12 00:00:00 EPS est. 0.70
• CAE.TO WATCH CAE.TO 2026-05-12 00:00:00 EPS est. 0.42
• WN.TO WATCH WN.TO 2026-05-12 00:00:00 EPS est. 0.98
• BTB-UN.TO HELD BTB-UN.TO 2026-05-12 00:00:00
• STN.TO WATCH STN.TO 2026-05-13 00:00:00 EPS est. 1.29
• MFC.TO HELD MFC.TO 2026-05-13 00:00:00 EPS est. 1.11
• H.TO WATCH H.TO 2026-05-13 00:00:00 EPS est. 0.61

The latest economic indicators suggest a mixed outlook for global growth, with inflationary pressures easing in some regions while others face risks of stagflation or deflation. This report delves into key trends impacting major economies and central bank policies. US Inflation & Labour Consumer Price Index (CPI) stood at 333.02 in April, while Producer Price Index (PPI) was recorded at 154.0 for March.

These figures indicate that goods-side disinflation is progressing but has not yet reached its full extent. The lag between PPI softening and CPI suggests pipeline price pressure is easing. Meanwhile, labour demand remains robust with a job openings rate of 4.1%, though unemployment has slightly increased to 4.3%.

Historically, this level of unemployment shifts the Federal Reserve’s tone towards potential easing measures. While the Fed is not in crisis mode, current data supports discussions around interest rate cuts. Global Growth United States Gross Domestic Product (GDP) grew quarter-over-quarter at a rate of 0.49%, and Canada followed closely with 0.40%.

Both figures indicate positive but unremarkable growth trends without signs of acceleration. Germany’s unemployment rate stands at 4.0% alongside World Bank Consumer Price Index (CPI) around 2.3%, suggesting relative stability compared to other regions. The United Kingdom, however, faces greater risks with an unemployment rate of 5.2% and CPI at 3.3%, indicating potential stagflationary pressures.

China’s near-zero CPI (0.22%) highlights persistent deflationary pressure within the country, which limits global commodity demand and stresses trade-dependent economies. Central Bank Posture The U.S. yield curve is currently positively sloped by +81 basis points (bps) with 2-year yields at 3.60% and 10-year yields at 4.41%, indicating market expectations of a growth recovery rather than a recession.

Canada’s yield curve also shows positive slope (+61bps), but the Bank of Canada has already reduced interest rates to 2.25%, compared to U.S. federal funds implied in the range of 3.5-4.0%. This leaves room for further rate cuts by the BOC, which could favour Canadian dollar (CAD) strength if unemployment continues rising towards 4.5% and a Fed pivot becomes likely in Q3 2026.

Fiscal Health While World Bank CPI data from 2024 adds limited precision to recent trends, it is evident that core inflation has largely normalized across Europe, with Canada nearing its target levels. China’s deflationary pressures and sticky inflation rates in Australia and the UK are notable outliers, but there are no acute signs of sovereign financial stress in this dataset.

Macro Outlook The current economic environment exhibits mid-cycle dynamics leaning towards softening trends. Gradual cooling in U.S. labour markets reduces risks of a hard landing while also diminishing arguments for maintaining higher interest rates longer term. A Federal Reserve pivot towards easing measures is becoming increasingly probable, which would likely benefit risk assets and further support the Canadian dollar along with continued positive performance from equities and Bitcoin (BTC).

However, China’s potential export of deflation remains a significant tail risk that could depress commodity prices and adversely affect resource-dependent sectors in Canada before the Fed can take countermeasures.