News

Canada December manufacturing index edges higher but remains below 50 for 11th month

Posted on: Jan 03 2026

The Canadian manufacturing sector remains stuck in the mud as the final Canadian S&P Global survey of manufacturers was released.

It’s another soft reading for the Canadian economy, and the details here are painting a stagflationary picture that the Bank of Canada isn't going to like.

Here are the details from the S&P Global Manufacturing PMI for December:

  • 48.6 vs 48.4 prior.

  • Output Index: Declined at a quicker rate

  • New Orders with a 'solid decline'

  • Employment: 11th consecutive month of job shedding.

  • Prices: Selling price inflation hit a six-month high.

The report explicitly blames tariffs for driving up prices while simultaneously killing demand. Fortunately, the consumer side of the economy has remained strong as manufacturing gets left behind. A year of prolonged uncertainty around USMCA negotiations isn't going to help.

Firms reported that average lead times lengthened because of customs delays, specifically with US imports. Even worse, the uncertainty around trade policy is causing a "general air of uncertainty" that is weighing on output for the year ahead, something that will hit capex

Paul Smith, Economics Director at S&P Global:

“Canada’s manufacturing economy ended the year on a subdued note, with output and new orders both falling again – as they have done in each month of 2025 apart from January. Once again, tariffs remained an important theme amongst PMI survey respondents, with a general air of uncertainty continuing to negatively weigh on current and expected output levels for the year ahead. “This means firms remain naturally cautious, and seeking an operating leanness, either in terms of labour capacity or inventory holdings. Purchasing activity was also cut again in December, although supply-chain delays continue, and the price of inputs shifted higher – which firms once again closely linked to tariffs.”

This is a reminder that there are problems in Canadian manufacturing as this survey has been in contraction for 11 straight months, shedding jobs the whole way down. Normally, that would scream for more cuts but look at the inflation component: Input price inflation picked up, and selling price inflation is at a six-month high. Firms are passing those tariff costs right along to consumers.

USD/CAD is up 16 pips on the first real trading day of 2026 after falling about 5% last year.

Yesterday, I wrote a Canadian dollar outlook for 2026 and later today I will be on BNNBloomberg TV talking about it.

This article was written by Adam Button at investinglive.com.
Monday open indicative forex prices, 22 December 2025, and a look at what's coming today

Posted on: Dec 22 2025

As is usual for a Monday morning, market liquidity is very thin until it improves as more Asian centres come online ... prices are liable to swing around, so take care out there.

Do be aware that many wholesale market participants have closed now for the holiday period. This is partially because they have closed for the holiday period (d'uh) and partially because others have closed so liquidity and market tradability have diminished. If you are a retail trader it'll pay to take extra care right through now until January 5, the absence of the other time frame (OTF) until then will make trading more choppy. If that's your bag, great, but if not your time may be better spent and capital preserved for ammo for the new year.

Coverage on investingLive will diminish until January 5. We'll still be around, but not quite so much.

After all that, early indications, not too much change from late Friday is showing.

  • EUR/USD 1.1719
  • USD/JPY 157.69 (check this out, spot on: Disastrous day: The yen is a big problem for Japanese officials)
  • GBP/USD 1.3391
  • USD/CHF 0.7947
  • USD/CAD 1.3795
  • AUD/USD 0.6611
  • NZD/USD 0.5750

As for the calendar, its nearly empty. Even that People's Bank of China rate setting is a non-event, more on this below:

China's Loan Prime Rates (LPRs) were held steady in November 2025, , marking the sixth consecutive month without a change

  • the one-year LPR at 3.0%
  • and the five-year LPR (for mortgages) at 3.5%

Most lending in China is tied to the one-year LPR, while the five-year rate guides mortgage pricing. Both rates were last trimmed by 10 basis points in May.

A look at the past changes in the LPR, since early 2022:

China's main policy rate is now the reverse repo rate, currently at 1.4% for the 7-day.

The 7-day rate serves as a key policy benchmark, influencing other lending rates like the Loan Prime Rates (LPRs). The PBOC uses these open market operations to inject or absorb funds, influencing interbank lending rates.

This article was written by Eamonn Sheridan at investinglive.com.
WSJ report on advice to Trump from his lawyers regarding serving a third presidential term

Posted on: Dec 18 2025

President Donald Trump has been presented with a draft manuscript by prominent constitutional lawyer Alan Dershowitz examining whether the U.S. Constitution definitively bars a president from serving a third term, reopening a long-settled legal and political debate around presidential term limits.

The Wall Street Journal (gated) carries the report.

According to Dershowitz, who previously represented Trump during his first-term impeachment proceedings, the president received and discussed the draft during a recent Oval Office meeting. The forthcoming book, titled “Could President Trump Constitutionally Serve a Third Term?” and slated for publication next year, argues that while the Constitution clearly limits presidents to two elections, it may be ambiguous on other pathways to a third term.

“The Constitution is not clear on whether a president can become a third-term president,” Dershowitz told The Wall Street Journal, emphasising that the question is less about electoral limits and more about succession and procedural outcomes. Trump, he said, treated the discussion as an intellectual exercise and moved on to other topics, adding that he does not believe the president intends to pursue a third term.

Publicly, Trump has maintained that the Constitution is “pretty clear” that he cannot run again, a position echoed by White House chief of staff Susie Wiles in a recent interview. However, comments from other administration figures have kept the issue alive. White House spokeswoman Abigail Jackson said the country would be “lucky” to have Trump serve for a longer period, stopping short of endorsing a legal pathway.

Dershowitz’s book outlines several hypothetical scenarios, including one in which a third election could ultimately be decided by Congress if Electoral College members abstain from voting. Such an outcome would be unprecedented, and the National Constitution Center notes that elector abstentions have been extremely rare and never resulted in a congressional decision.

Legal scholars remain sceptical. Hofstra law professor James Sample described the Electoral College scenario as “absurd,” though he outlined a more plausible, if highly unconventional, route involving allies winning the presidency, resigning, and elevating Trump through the line of succession.

We've all been following along with Trump's economic management since he resumed office in January this year. Policy volatility has been reflected in market volatility, rising inflation, and slowing job growth. Seven more years of this may lie ahead.

This article was written by Eamonn Sheridan at investinglive.com.