Canada: where things stand
BoC 28 Oct: hike debateThe data week is here. Statistics Canada publishes September inflation on Monday 19 October, along with the Bank of Canada's business and consumer surveys. A Reuters/LSEG poll expects inflation to rise to 3.2% from 3.0%, while RBC's Nathan Janzen expects it to hold at 3.0%. He calls 28 October a 'live' meeting but a hike is not his base case. Canada also lost 68,000 jobs in September, the second straight monthly fall, which argues against raising rates (BNN Bloomberg, 16 Oct).
Canada's rate call is suddenly live. The Bank of Canada has held at 2.25% since October 2025, but after Governor Macklem said on 2 September that upside inflation risks were growing, several forecasters now expect a hike on 28 October: UBS, Manulife, Oxford Economics and Scotiabank say yes, while RBC sees a close call and a hold, with hikes from early 2027 (Canadian Mortgage Professional, 2 Oct).
Two numbers decide it. September CPI is out on Monday 19 October; inflation was 3.0% in August and one preview expects 3.0% again (UBS 3.3%). The 5-year Government of Canada bond yield stood at 3.59% on 6 October, against 2.75% a year earlier, which is why fixed mortgage rates have been rising (a lender spread of 1.2 to 2.0 points on that yield implies roughly 4.8% to 5.6%, per Wealth North; lender quotes vary).
Shares: the S&P/TSX composite rose 347.89 points to 35,502.65 on 2 October and gained more than 300 points on 13 October on energy stocks, against a record near 36,660 in August. Oil was about US$91 a barrel on 2 October, and new US import bans on some Canadian goods add trade uncertainty.
- Sept CPI Mon 19 Oct: forecasts 3.0% to 3.2% (Aug 3.0%); Canada lost 68,000 jobs in Sept
- Policy rate: 2.25%, decision 28 Oct
- CPI inflation: 3.0% (August); September CPI on 19 Oct
- 5-year GoC yield: 3.59% (6 Oct)
- TSX: 35,502.65 (2 Oct), up 300+ points on 13 Oct; record near 36,660 in August
If you're new to this
The Bank of Canada sets its overnight policy rate, the rate that banks charge each other, and uses it to steer inflation toward 2%. Commercial banks set their prime rate from it, which drives variable mortgages and lines of credit.
The Consumer Price Index (CPI) measures how much a typical basket of goods and services costs, compared with a year earlier. When inflation is above target, the bank is less likely to cut rates.
The S&P/TSX Composite is the main Canadian share index. It is heavy in banks, energy and mining, so it rises and falls with commodity prices and financial-sector earnings, and is less weighted to technology than US indexes.
The Canadian dollar also matters. When oil rises it often strengthens, which changes the value of any US or international assets you hold.
As of 16-17 Oct 2026. Sources: BNN Bloomberg (16 Oct), Canadian Mortgage Professional (2 Oct), Wealth North. Yields and TSX levels not re-verified. General information, not advice.
United States: rates rising again
Fed 28 Oct; CPI 3.7%Inflation just came in hot. US September CPI, released on 14 October, rose 3.7% from a year earlier (forecast 3.6%), with core at 2.6% (forecast 2.5%), according to Kiplinger. That lands two weeks before the Fed's 27-28 October meeting.
The Fed raised its target range to 3.75-4.00% on 16 September, its first hike since 2023, by a unanimous 12-0 vote. A hold in October was widely expected before the CPI release (markets gave a hike roughly 16-18% as of 9 October), though most officials expect another increase by year-end. The decision is on 28 October at 2:00 pm Eastern.
- Fed target range: 3.75-4.00% (raised 16 Sep)
- Sept CPI: 3.7% (core 2.6%)
- Next decision: 28 Oct, 2:00 pm ET; then 8-9 Dec
If you're new to this
The Federal Reserve is the US central bank. Its policy committee sets a target range for the federal funds rate, and that rate anchors borrowing costs worldwide because the US dollar is the world's main reserve currency.
When the Fed raises rates, newly issued bonds pay more, so existing bonds with lower rates fall in price. High rates also make future profits worth less today, which hurts fast-growing technology shares most.
Because the S&P 500 and Nasdaq are such large parts of global equity funds, a change in US policy can move your ETF even if you hold no US-specific fund.
As of 15 Oct 2026. Sources: Kiplinger (CPI, 14 Oct), political.org preview (12 Oct). · not re-verified on 16 Oct
United Kingdom and France
BoE 5 Nov; ECB 29 OctEurope is tightening on both sides of the Channel. The Bank of England held Bank Rate at 3.75% on 17 September, but by a 6-3 vote, with three members wanting a hike to 4.00%. UK inflation was 3.1% in August, September's figure is due on 21 October, and the next decision is on 5 November. Goldman Sachs has forecast a hike then (Kitco, 14 Sep).
France follows the ECB, which raised its deposit rate to 2.50% on 10 September (effective 16 September), its second hike this year. Euro-area inflation jumped to 3.8% in September (flash, 2 October) from 3.2%, led by energy at 18.8%. The next ECB decision is 29 October, and pricing in late September put a hike to 2.75% at about 60%.
France's 10-year yield was 4.85% on 13 October, after topping 5% earlier in the month, a more-than-two-decade high. Paris targets a 5% of GDP deficit in 2027, but support in parliament is uncertain before next year's presidential election.
- Bank Rate: 3.75% (6-3 hold, 17 Sep); next 5 Nov
- ECB deposit rate: 2.50%; next 29 Oct
- Euro-area inflation: 3.8% (Sept flash)
- France 10-year yield: 4.85% (13 Oct)
If you're new to this
Both countries have high debt and slow growth. In a high-debt country, rising interest rates make the interest bill larger every year, which leaves less for services or tax cuts.
France does not set its own rates. As a euro member it follows the European Central Bank, so it cannot cut rates to help itself and must instead cut spending or raise taxes.
The UK has its own currency, so the pound can fall when investors worry. That raises import prices and inflation, another reason the Bank of England is cautious.
As of 15 Oct 2026. Sources: MTS Insights (BoE), Nation Thailand (ECB, 11 Sep), Asianet/Eurostat (2 Oct), Trading Economics (13 Oct). · not re-verified on 16 Oct
China: slower growth
Q3 GDP 19 OctChina is on hold and about to show its third-quarter score. GDP figures are due on Monday 19 October (10:00 am Beijing time). The second quarter grew 4.3%, reportedly the weakest pace in about three and a half years.
The People's Bank of China left its loan prime rates at record lows for a 16th straight month in September: 3.0% for one year and 3.5% for five years (the mortgage reference). Exports stayed strong on AI-related demand, but retail sales missed expectations and home prices kept falling, though by the least in eight months.
- 1-year LPR 3.0%, 5-year LPR 3.5% (held, Sept)
- Q2 GDP: 4.3%; Q3 GDP due 19 Oct
If you're new to this
GDP (gross domestic product) is the total value of goods and services produced. Growth of 4.3% is strong for a large developed economy but slow for China, which depends on growth to employ millions of people.
China is the world's largest manufacturer and a major buyer of oil, iron ore and copper. When its growth slows, commodity prices and Canadian resource shares often weaken.
Chinese shares are in most global and emerging-market ETFs but at a modest weight. They are subject to political risk, since regulators can change rules suddenly.
As of 15 Oct 2026. Sources: Trading Economics (20 Sep), Finance Calendar (release date). · not re-verified on 16 Oct
Registered accounts: TFSA, RRSP and FHSA
CanadaWhere you hold an ETF can matter as much as which one you pick, because the account decides how its growth and income are taxed.
If you're new to this
A Tax-Free Savings Account (TFSA) lets investments grow and be withdrawn tax-free. You contribute from money that has already been taxed. Withdrawn room comes back the following year.
A Registered Retirement Savings Plan (RRSP) gives you a tax deduction when you contribute, and growth is untaxed until you withdraw, when it counts as income. It tends to suit people whose tax rate now is higher than it will be in retirement.
The First Home Savings Account (FHSA) combines both: a deduction going in and tax-free withdrawals if used for a first home. It only suits people who qualify as first-time buyers.
Contribution limits change each year and unused room carries forward, so check the Canada Revenue Agency for yours. A non-registered account has no limit but is taxed on dividends, interest and gains. This is general information, so confirm your position with a tax professional.
General information · not re-verified on 16 Oct
All-in-one ETFs, fees and asset mix
Core ideasThe simplest way to invest is one fund. An all-in-one ETF holds a mix of stocks and bonds and rebalances itself, which is why it is so popular for keeping a plan simple.
If you're new to this
An ETF (exchange-traded fund) is a basket of investments that trades on the stock exchange like a single share. An index ETF simply copies a market index, such as the S&P 500, without anyone picking stocks.
The management expense ratio (MER) is the yearly fee taken from the fund, shown as a percentage. All-in-one ETFs usually charge roughly 0.2% to 0.25%. Fees compound against you, so a 1% fund costs thousands more over decades than a 0.2% fund.
Asset allocation is the split between stocks (higher growth, bigger swings) and bonds (steadier, lower return). All-in-one funds come in conservative, balanced, growth and all-equity versions. A person at 45 typically has about 20 years before drawing on retirement money, but how much risk suits you depends on your goals and temperament.
Rebalancing means selling a bit of what has grown and buying what lagged, to return to the target split. An all-in-one does this inside the fund.
General information · not re-verified on 16 Oct
Rates, bonds, currency and withholding tax
Core ideasFour quiet mechanics that shape your returns: how bond prices react to interest rates, how currency moves, what hedging does, and the tax withheld on foreign dividends.
If you're new to this
Bond prices and yields move in opposite directions. If rates rise, newly issued bonds pay more, so older bonds fall in price, and longer-dated bonds fall further. A bond ETF can therefore lose value while rates rise, even though the bonds will pay back at maturity.
When a Canadian holds US or international shares, returns depend on the share price and on the exchange rate. If the US dollar falls against the Canadian dollar, a US fund can lose value in Canadian terms. A hedged fund removes most of that effect for a small cost, while an unhedged fund leaves it in.
Foreign governments often withhold tax on dividends paid to non-residents, typically 15% for US dividends under the tax treaty. How much you pay depends on the account (an RRSP is treated more favourably for US-listed funds than a TFSA) and whether the fund is listed in Canada or the US, so it is worth reading the fund's documents.
None of this is a recommendation, and the right answer depends on your situation. A fee-only financial planner can check your specifics.
General information · not re-verified on 16 Oct