Daily Pulse
One of our most accessible tools, this daily comment keeps you abreast of developments on the North American and international financial markets.
Michel Doucet
Vice-President and
Portfolio Manager
April 2, 2025
Canada
Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum held a “productive” phone call, according to a readout from the Canadian Prime Minister’s office. The leaders discussed the importance of building upon the strong trading and investment relationship between the two countries. They emphasized the importance of safeguarding North American competitiveness while respecting the sovereignty of each nation.
The US is targeting Quebec's French-language law, Bill 96, as a barrier to trade, which may complicate Canada's response to President Donald Trump's tariffs. The law, adopted in 2022, requires companies to use French in workplaces and with clients, and to have French as the dominant language on trademarks, which may increase costs for businesses.
Provinces are expecting wider deficits and higher funding needs, which means selling more bonds, with a combined deficit of C$32 billion for the 2025-2026 fiscal year. Provincial issuers are boosting deal sizes and extensively pre-funded for the fiscal year, with seven provinces planning to raise nearly C$30 billion in pre-borrowing for 2025-2026. Investors are receptive to the increased bond supply, with demand rising to meet supply and the risk premium for provincial bonds remaining tight compared with Canada's federal debt.
United States
President Donald Trump's tariffs will take immediate effect after they are announced on Wednesday. The tariffs are part of Trump's plan to rebalance US trade relationships and bring back manufacturing to the US. Trump is willing to listen to foreign governments and corporate leaders who ask for lower tariff rates, but is focused on "fixing the wrongs of the past" and giving American workers a fair shake.
US factory activity contracted in March for the first time this year and prices accelerated sharply for a second month as the drumbeat of higher tariffs reverberated through the economy. The Institute for Supply Management's manufacturing index declining 1.3 points to 49. The group's price measure increased to the highest since June 2022, with a 14.5-point increase over the past two months, the most over a comparable period in four years.
Europe
The European Union is preparing to retaliate against the US if President Donald Trump imposes reciprocal tariffs on the bloc this week, with a "strong plan" in place. The EU is considering deploying its anti-coercion instrument, which could lead to restrictions on trade and services, intellectual property rights, foreign direct investment, and access to public procurement. The EU's goal is a "negotiated solution" once the new tariffs are announced, and is preparing countermeasures on up to €26 billion of US goods over metals duties.
Asia
China conducted a second day of military drills around Taiwan, which tested the ability of the People's Liberation Army to conduct a blockade and involved "precision strikes" on simulated targets. The drills added to Beijing's campaign of intimidation against Taipei, with at least seven sets of drills held around Taiwan since President Lai Ching-te took office last year. The exercises are also seen as a signal to Washington, Taipei's main military backer, and are part of a broader campaign of political coercion by Beijing against Taiwan.
Trump will today consider a proposal for TikTok’s US operations from an Oracle-led JV that includes Blackstone and potentially other investors, people familiar said.