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
July 4, 2025
Canada
Canada’s international merchandise trade deficit narrowed to $5.9B in May, after reaching a record low of -$7.6B in April. Canada’s trade surplus with the US rose slightly from $3.1B to $3.2B in May. The share of exports to the US fell from a monthly average of 75.9% in 2024 to 68.3%—one of the lowest shares ever recorded. Despite an improvement in Canada’s trade balance in May, the data point to a further deterioration in trade activity with our southern neighbour. As a result, net exports are expected to drag down Q1 growth by about 5.7% annualized.
Canada's finance minister Francois-Philippe Champagne believes Canada can negotiate a better trade deal with the US than other nations due to its significant trade relationship with the US. Canadian Prime Minister Mark Carney and US President Donald Trump aim to hammer out a deal by July 21 to govern the two countries' trade relationship, which saw over $900 billion in goods and services exchanged last year. Champagne insists that Canada's dairy and poultry supply management system is not up for negotiation, and that all new US tariffs should be lifted as part of any deal.
United States
US job growth exceeded expectations in June, with payrolls increasing 147,000, driven by a jump in state and local government employment, particularly in education. Private payrolls rose just 74,000 in June, the least since October, indicating a slowdown in hiring across the rest of the economy, with declines in manufacturing, wholesale trade, and business services. The jobless rate declined to 4.1%, and Treasury yields rose, taking pressure off the Federal Reserve to lower interest rates, as the report validated the Fed's patient stance toward rate cuts.
The House passed a $3.4 trillion fiscal package that cuts taxes, curtails spending on safety-net programs, and reverses much of Joe Biden’s efforts to move the country toward a clean-energy economy. President Donald Trump secured the passage of the bill, which he plans to sign on Friday, after leveraging his sway over the Republican party to overcome resistance from conservative hardliners and swing-state GOP moderates. Democrats opposed the bill, saying it will strip health care for millions of people who depend on Medicaid to fund tax cuts for the wealthy, while Republicans argue it will bolster economic growth with $4.5 trillion in tax cuts.
Europe
Russia launched a record air strike on Ukraine, firing 550 drones and missiles, mostly targeting Kyiv, with 478 aerial targets intercepted. US President Donald Trump expressed disappointment over the outcome of his phone call with Vladimir Putin, saying he doesn't think Putin is looking to stop the war. Ukrainian President Volodymyr Zelenskiy urged Ukraine's allies to maintain deliveries of air defenses and to intensify sanctions on Russia, saying "without really large-scale pressure, Russia will not change its stupid destructive behavior."
Germany is considering purchasing up to 2,500 armored fighting vehicles and as many as 1,000 battle tanks as part of a joint European effort to create new NATO brigades to deter Russia. The order, worth up to €25 billion, would equip seven combat brigades that Germany has pledged to contribute to NATO within the next decade.
Asia
The Chinese government plans to cancel the second day of a two-day summit with European Union leaders, which was scheduled to take place in China later this month. The cancellation is seen as a sign of growing tensions between Brussels and Beijing, which have been strained by disagreements over the war in Ukraine, Chinese industrial policy, and trade issues. The EU-China relationship has been further complicated by China's recent export controls on rare earth magnets, which have hit European industries hard, and the lack of progress on trade and economic issues.