dailypoints20260821

On Deck for Friday, August 21st

Country Date Time Indicator Period BNS Consensus Latest CA 08-21 08:30 Retail Sales (m/m) Jun 0.4 -- 1.0 GLOBAL ECONOMICS CA 08-21 08:30 Retail Sales ex. Autos (m/m) Jun -- -- 1.2

DAILY POINTS • Markets may exit the week on calmer footings August 21, 2026 @ 7:40 EST • Will it be Agreement Day in Canada?

• Be careful with sloppy auto tariff talk Contributors • Canadian retail sales due for June and July updates Derek Holt VP & Head of Capital Markets Economics Scotiabank Economics • Global PMIs signal regionally divergent growth and inflation • UK retail sales disappoint

Stocks up, check. Oil slightly lower, check. Sovereign bond yields flat to a touch lower in the US and Canada, and slightly outperforming across European front-ends, check. Dollar Chart 1 weaker against all majors, check. Fingers crossed we exit the week sans any fireworks. Global Composite PMIs 58 PMIs and light overnight data didn’t much move the needle. composite PMIs, % balance/diffusion EZ UK If anything does matter to markets today then it could be the countdown to a possible 56 AU JP Canada-US deal that won’t arrive until after the close at best, but we might get further 54 leaks and plants on the content. Data risk may also matter a touch with US PMIs and Canadian retail sales on tap. 52 AGREEMENT DAY IN CANADA? 50 It’s agreement day in Canada where the text of a trade and security arrangement with the US 48 is due by tonight according to ongoing guidance from the Canadian side. Negotiations continue with further meetings planned today at 10:30amET and probably more high level 46 calls. If an agreement arrives, then it’s not clear if that means you and I will see it tonight or Sep-23 Nov-23 Jan-24 Mar-24 over the weekend, or if we’ll have to parse through leaks and whatever ‘sources’ tell the press. May-24 Jul-24 Sep-24 Nov-24 Jan-25 Mar-25 May-25 Jul-25 Sep-25 Nov-25 Jan-26 Mar-26 May-26 Jul-26 Sources: Scotiabank Economics, S&P Global. There is some confusion on the possible autos treatment given this article but I found it poorly worded. In calculations that were shared in yesterday morning’s note I had incorporated the lowered autos tariff to 15% from 25% with only an exemption for US content in vehicles but a full CUSMA exemption for parts content from Canada, the US and Mexico. The article says no CUSMA exemption for auto exports but fails to draw a distinction between assembled autos versus parts. Parts are about two-thirds of Canadian auto exports that are subject to any tariffs and so the CUSMA exemption for them matter more than for assembled autos. Ideally, a sensible agreement would exempt all CUSMA content from both assembled autos and parts and that may be what Ontario’s Premier will insist upon before stepping out of the shadows to offer his take.

Regardless, a lot could still change by the time we get the text and in further refinements that are possible thereafter. Inflammatory talk—say from the US VP—should be muzzled with some respectful sensitivity to how Canadians need to offer the political support to the Carney administration and provinces especially with Quebec’s election in October.

The sensible outcome would be for the US to drop all of its foolish sector tariffs against Canada as they violate the CUSMA agreement and would get anyone with a modicum of understanding of basic economics an ‘F’ in first year for supporting them.

CANADIAN RETAIL SALES TRACKING SOFT Q2 AFTER ROBUST Q1, Q3 PENDING

Canada updates retail sales for June and July this morning (8:30amET). Statcan had offered earlier guidance for June’s change in the dollar value of sales at +0.4% m/m SA.

Visit our website at scotiabank.com/economics | Follow us on Twitter at @ScotiaEconomics | Contact us by email at

That may be revised and we’ll get details like Chart 2 Chart 3 volumes versus price effects and sector details. Global Services PMIs Global Manufacturing PMIs services PMIs, % balance/diffusion 60 mfg. PMIs, % balance/diffusion The first estimate for July will also be made available. After rising by 5.4% q/q SAAR in Q1, 56 US 58 Japan US retail sales volumes are so far tracking a mild dip in 56 Japan 54 UK Eurozone Q2 pending June’s…