Canada: economy, interest rate and stock market
The central bank's policy rate is 2.25% (down 0.25 points over 12 months). Inflation was 2.1% in 2025 and GDP grew 1.7% (World Bank). S&P/TSX Composite is +20.0% over the past year.
Interest rate
2.25% set by Bank of Canada. Last change: −0.25 pt on 30 Oct 2025. Over 12 months: −0.25 pt. As of 19 Oct 2026.
| Took effect | Rate | Change |
|---|---|---|
| 30 Oct 2025 | 2.25% | −0.25 pt |
| 18 Sep 2025 | 2.50% | −0.25 pt |
| 13 Mar 2025 | 2.75% | −0.25 pt |
| 30 Jan 2025 | 3.00% | −0.25 pt |
| 12 Dec 2024 | 3.25% | −0.50 pt |
| 24 Oct 2024 | 3.75% | −0.50 pt |
| 5 Sep 2024 | 4.25% | −0.25 pt |
| 25 Jul 2024 | 4.50% | −0.25 pt |
| 6 Jun 2024 | 4.75% | start of our data |
All countries: central bank interest rates. Rates move stocks through borrowing costs and the currency: rising rates usually weigh on rate-sensitive stocks and help banks, falling rates the opposite.
Stock market: S&P/TSX Composite
| Level | 1M | 3M | YTD | 1Y |
|---|---|---|---|---|
| 35,973.45 | −1.0% | +1.4% | +13.4% | +20.0% |
Closing level on 22 Oct 2026. "vs 200-day avg" is how far the index is above or below its own average of the last 200 closes; "from 52-week high" is the drop from its highest level of the past year. Both are arithmetic on our price history, not a forecast.
Risk-on or risk-off?
Risk-on 4 of 5 price checks on S&P/TSX Composite are positive, as of 22 Oct 2026.
| Check | Reading today | Positive? |
|---|---|---|
| Index above its 200-day average | +4.3% vs average | Yes |
| 50-day average above the 200-day average | +4.5% | Yes |
| 3-month return positive | +1.4% | Yes |
| Within 10% of the 52-week high | -2.7% from high | Yes |
| Volatility at or below its own 1-year median | 20-day 14% vs median 13% (annualised) | No |
4 or 5 positive = Risk-on, 2 or 3 = Mixed, 0 or 1 = Risk-off. Each check uses only prices up to that day, so the same rule can be run on history (below). It describes how investors are behaving in this market, not what happens next.
- Global risk gauge (Market Compass): Risk-on, 0 of 6 warning signals on.
- Breadth: 31% of Canada's stocks are above their own 200-day average.
- Oil is up 19% in three months. Fuels are a large part of Canada's exports, so export earnings benefit.
- The central bank has cut its rate by 0.25 points over twelve months. Easing supports borrowing and stock valuations, and can squeeze bank margins.
| Strategy | Return a year | Worst fall |
|---|---|---|
| Buy and hold the index | 4.8% | −49.8% |
| Hold only when not Risk-off (2+ checks) | 5.4% | −32.6% |
| Hold only when Risk-on (4+ checks) | 3.9% | −23.4% |
The position is decided at one day's close and applied to the next day's return, so the rule never uses the future. Time out of the market earns nothing here. Limits: index price only (no dividends, no interest on cash), no trading costs or taxes, one market and one period, and a rule that did well or badly in the past can do the opposite next time. Hypothetical results, not a promise and not advice.
Stocks that fit the current setting
Risk-on setting: the screen looks for the strongest price momentum over the last six months (skipping the latest month) among stocks trading above their 200-day average. Chosen from the 300 most traded stocks in Canada, using prices up to 22 Oct 2026.
| Stock | Price | 3M |
|---|---|---|
AMD Advanced Micro Devices CDR (... | CAD 13.10 | −3.3% |
| AMD Advanced Micro Devices CDR (... | CAD 13.08 | −3.5% |
| MU Micron CDR (CAD Hedged) | CAD 37.54 | −7.5% |
BB BlackBerry Ltd | CAD 12.02 | −0.2% |
MATR Mattr Corp | CAD 20.12 | +13.0% |
AYA Aya Gold & Silver Inc | CAD 33.40 | +20.2% |
BDT Bird Construction Inc. | CAD 68.46 | −3.0% |
| LGD Liberty Gold Corp | CAD 1.83 | +35.6% |
ARG Amerigo Resources Ltd. | CAD 7.04 | −4.7% |
| HOOD Robinhood CDR (CAD Hedged) | CAD 15.72 | +1.1% |
These are candidates to research, not recommendations. The screen reads prices only: it knows nothing about the companies' earnings, debt or valuation, and a stock can fit the setting and still fall. Momentum screens tend to pick volatile stocks, so check the Volatility column. We cannot yet test this screen fairly on the past, because our price history only contains companies that are listed today, which flatters any screen. So instead of showing a backtest we record each day's picks and will judge the rule on what happens after the fact. Educational only, not financial advice.
Economy at a glance
| Measure | Latest | Year |
|---|---|---|
| Economy size (GDP) | $2.32 trillion | 2025 |
| GDP per person | $55,698 | 2025 |
| GDP growth | 1.7% | 2025 |
| Inflation (consumer prices) | 2.1% | 2025 |
| Unemployment | 6.9% | 2025 |
| Population | 41.7 million | 2025 |
| Current account balance, % of GDP | -1.0% | 2025 |
| Central government debt, % of GDP | 64.1% | 2024 |
| Exports of goods and services, % of GDP | 31.3% | 2025 |
| Imports of goods and services, % of GDP | 32.2% | 2025 |
Source: World Bank World Development Indicators, annual figures. The latest year is usually the previous calendar year, so these numbers are not live and are revised later by the World Bank.
Trade structure
Share of merchandise exports and imports by product group. ■ exports ■ imports.
High-technology products are 16.1% of manufactured exports (2024).
- Fuels are 26.7% of Canada's merchandise exports (and 6.1% of imports), so energy prices matter for what the country earns abroad.
- Exports plus imports equal 64% of GDP, so the economy is moderately open to trade.
- The current account was a deficit of 1.0% of GDP (2025): the country spends more abroad than it earns and relies on foreign capital to fill the gap.
These describe the structure of trade, using the figures above. They are not forecasts and not investment advice. Latest available year differs by group (usually 2024 or 2025).
More on Canada
Sources: Bank for International Settlements and central bank decisions (policy rates), World Bank (economy and trade), StocksXray price history (index). Educational only, not financial advice.