BoC Governor Tiff Macklem said on Saturday that the central bank plans to substantially raise its quarterly inflation forecast this month, reinforcing the hawkish tone he struck last week on energy-related price pressures. Oil prices stayed elevated amid attacks on tankers in the Strait of Hormuz, keeping inflation risks front and center for markets.

Financials weighed on the index, with major banks broadly weaker: Royal Bank of Canada fell 0.9%, while Bank of Montreal, Canadian Imperial Bank of Commerce, and National Bank of Canada each lost 0.8%. Mining shares also declined as gold prices retreated.

Imports totaled $7.06 billion, a decline of 1.8% year-on-year. Within the economic-use classification, the sharpest increase was recorded in parts and accessories for capital goods, which rose 11.9%. Imports of passenger vehicles were up 3.5%, while purchases of capital goods fell 10.4% and imports of consumer goods decreased 2.5%.

The move marked a break from last week’s tech selloff, when lackluster earnings from Anthropic and emerging signs of debt strain among cloud providers—most notably CoreWeave—weighed on appetite for speculative positions in the sector.

Dip buying was evident in key chip and platform stocks: Micron rose 3.1%, Intel gained 3%, and Amazon advanced 5%. Other large-cap tech names also climbed, with Nvidia up 1.4%, Alphabet 1.2%, Microsoft 0.8%, and Tesla 3.4%.

By contrast, bank stocks remained under pressure in the wake of last week’s earnings reports. Morgan Stanley slipped 1%, Bank of America declined 1.7%, and Wells Fargo fell 2.5%.

The increase of 789M in the trade surplus between August and September indicates that Argentina either expanded its export revenues, reduced import spending, or a combination of both. While the underlying drivers are not detailed in the release, the wider surplus points to an improved trade position as the third quarter of 2026 draws to a close.

This upward shift in the trade balance could provide some support to Argentina’s broader macroeconomic framework, particularly in terms of foreign currency inflows and balance of payments dynamics, at a time when external stability remains a key focus for policymakers and financial markets alike.

Protests in France and Italy over rising living costs escalated into confrontations with security forces, darkening the outlook for both countries’ budget approvals ahead of next year’s elections. This comes at a time when rising yields across the Eurozone had already stoked fears of contagion in the bloc’s sovereign bond markets.

Financials led the decline, with Deutsche Bank, BNP Paribas, Santander, UniCredit, and Intesa Sanpaolo all losing more than 2%. Industrial names also retreated, with Airbus and Rheinmetall falling close to 3%. By contrast, Hermès and SAP hovered near the flatline as investors looked ahead to their earnings reports later this week.

Mining shares also came under pressure: Anglo American fell 4%, Glencore declined more than 3.5%, and Rio Tinto lost almost 2%. Aerospace and defence stocks weakened as well, with Rolls-Royce and BAE Systems both down around 2%.

Investors are now looking ahead to UK September inflation and retail sales data due later this week. Focus is also shifting to Finance Minister John Healey’s first budget statement, scheduled for next week. Meanwhile, oil prices eased back from five-month highs as traders weighed tensions in the Middle East against the resilience of regional supply.

The modest uptick suggests a small but noticeable move in short-term government borrowing costs, reflecting current market demand for U.S. short-dated debt. Investors and analysts closely monitor the 6‑month bill as a benchmark for short-term interest rate conditions and liquidity preferences in the U.S. money markets.

With the yield now at 4.220%, compared with 4.200% previously, the auction result points to a marginal increase in the return investors require to hold U.S. government paper over the next half year as of the latest data update on October 19, 2026.

The marginal move higher in the 3-month bill yield suggests a modest adjustment in short-term rate expectations, with investors demanding a fractionally higher return to hold U.S. government debt at the very front end of the yield curve. While the change is small, shifts in T-bill yields are closely watched as a barometer of immediate market sentiment toward interest rates and liquidity conditions.

At the same time, trade tensions with Canada continue to restrict lumber supply while still exerting downward pressure on prices. Although the US Department of Commerce reduced antidumping and countervailing duties on Canadian softwood lumber to 24.75% from 35.16%, a separate 10% US tariff lifts the total duty burden to 34.75%, limiting the scope for a recovery in supply. The US Lumber Coalition welcomed the move, as US forestry interests have long accused Canadian producers of dumping lumber in the American market. By contrast, the NAHB has called for a halt to tariffs on building materials.

The capesize index, tracking ships that typically carry 150,000-ton cargoes such as iron ore and coal, climbed 3.6% to 3,365 points, supported in part by higher iron ore prices amid stronger crude steel output and better-than-expected economic growth in China. The supramax index inched up 0.2% to 1,868 points.

In contrast, the panamax index, which reflects rates for vessels usually carrying 60,000 to 70,000 tons of coal or grain, slipped 1.2% to 2,286 points.

While more expensive energy pushed headline inflation higher, core inflation remained subdued. The CPI-median measure slowed to 1.9%, and CPI-trim eased to 1.8% in September, signaling limited underlying price pressures.

Despite the softer-than-expected reading, markets continued to see the Bank of Canada’s policy stance as leaning toward tighter conditions, as officials highlighted upside risks to inflation. Governor Tiff Macklem said on Saturday that the central bank expects to significantly raise its quarterly inflation forecast this month, reinforcing hawkish comments made the previous week about energy-driven price pressures.

The index’s component measuring current sales conditions slipped two points to 33, matching a 14-year low. Builders’ sales expectations for the next six months dropped five points to 32, the weakest level since November 2022, while the gauge of prospective buyer traffic fell five points to 18.

Pricing pressure intensified as well: 43% of builders reduced home prices in October, the highest share recorded during the 2020–2026 period. The average price reduction held at 6% for the seventh consecutive month.

“Housing remains squeezed by supply-side constraints and significant affordability challenges. Demand persists, but higher mortgage rates, elevated construction costs and weaker consumer confidence are keeping more buyers on the sidelines,” said Robert Dietz, NAHB chief economist.

Market participants are now focused on the Fed’s upcoming policy decision and the release of US PCE inflation data, the central bank’s preferred inflation gauge. According to the CME FedWatch Tool, futures currently imply a 15% probability of a rate hike this month, rising to 89% for a move in December.

In the euro area, the European Central Bank is widely expected to deliver at least one additional 25-basis-point increase this year to tackle entrenched price pressures. Although gold is traditionally viewed as an inflation hedge, the prospect of higher interest rates generally weighs on the non-yielding metal by increasing the opportunity cost of holding it.

Despite the softer-than-expected figures, the policy outlook at the Bank of Canada remained skewed toward tighter conditions, as officials continued to highlight upside risks to inflation. Governor Tiff Macklem said on Saturday that the central bank expects to raise its quarterly inflation forecast significantly this month, reinforcing earlier hawkish comments about energy-driven price pressures. In addition, expectations that the interest-rate gap between the US and Canada will narrow have lent further support to the loonie.

The decline marks a further move deeper into pessimistic territory, as readings below 50 signal that more builders view market conditions as poor rather than good. The drop from September’s level of 32 to October’s 29 suggests growing concern over demand, affordability, or financing conditions in the housing market.

While the index remains well below the expansionary threshold, the October reading reinforces the narrative of a challenging environment for new home construction heading into the final quarter of 2026, as builders continue to reassess sales expectations and buyer traffic amid a cooling market backdrop.

Even with the modest downside surprise, expectations for the BoC remained skewed toward tighter policy, as officials continued to highlight upside risks to inflation. Governor Tiff Macklem said on Saturday that the central bank plans to raise its quarterly inflation forecast significantly this month, reinforcing last week’s hawkish comments on energy-related price pressures.

Oil prices stayed elevated amid attacks on tankers in the Strait of Hormuz, keeping inflation concerns in focus. Still, energy producers retreated as crude pulled back from recent highs. Major banks also weakened, with RBC, BMO, and Scotiabank each down about 0.5%, while mining stocks declined alongside a slight dip in gold prices.

The tech-sector advance marked a reversal from last week’s weakness, when disappointing financial results from Anthropic and signs of mounting debt pressure among cloud providers—most notably CoreWeave—weighed on demand for more speculative positions in the space. This session, dip buyers stepped in, driving AMD, Micron, Lam Research, and SanDisk roughly 5% higher each, while CoreWeave itself rebounded to close about 8% higher.

Earlier credit stress in AI-related names had also eased worries that the US Treasury might be further crowded out of capital by primary dealers, helping to pull longer-term yields lower. Bank stocks were broadly subdued in the wake of their recent earnings releases, while Meta and Tesla edged lower ahead of their own results later this week.

Although Bolsonaro has yet to present detailed policy proposals, market participants continue to view him as more inclined to implement fiscal reforms, including spending cuts, which are considered key to creating room for lower interest rates. Financial stocks mostly advanced, with Itaú, Itaúsa, and Banco do Brasil each gaining around 1%. Utilities also performed well, with Axia rising more than 1%. Among other highlights, Rede D’Or gained 2%, and Embraer added 1%. In contrast, Petrobras slipped 1% as the recent rally in oil prices lost momentum.

Speaking at the IMF’s annual meetings in Bangkok on Friday, Fed Chair Warsh avoided signaling a specific outcome for this month’s FOMC meeting, emphasizing that hotter-than-expected inflation data had not changed his overall assessment of the US economy. His comments helped solidify market expectations that the Fed will keep rates on hold in the near term. Both CPI and PPI releases last week exceeded forecasts, underscoring persistent price pressures. Oil prices slipped slightly on Monday but remained elevated.

Governor Tiff Macklem said on Saturday that the central bank expects to lift its quarterly inflation forecast significantly this month, reinforcing the more hawkish tone he struck last week regarding energy‑related inflationary pressures. Oil prices stayed elevated amid attacks on tankers in the Strait of Hormuz, keeping inflation risks in focus.

In corporate news, Reliance Worldwide reported that no rival bidder emerged during the “go‑shop” period under Brookfield’s proposed acquisition of the company.

The modest increase in yield on the one-year French Treasury bills (BTFs) suggests slightly higher funding costs for the French government compared with the prior auction. While the move is incremental, it may reflect shifting short-term interest rate expectations or evolving market sentiment toward euro-area sovereign debt.

Investors will be watching upcoming auctions and European Central Bank communications closely to gauge whether this uptick marks the start of a firmer trend in short-term funding costs or remains a minor adjustment within a relatively stable rate environment.