Ali Jaffery and Katherine Judge over at CIBC noted the clock is ticking down to the end of the tariff reprieve period, and all eyes will be on U.S. President Trump on Tuesday, March 4, to see if he follows through with imposing a broad tariff on Canadian goods.

The CIBC duo said employment data on Friday could show some of the first signs of tariff uncertainty in the labour market, with a sharp slowdown in hiring and an increase in the unemployment rate expected. But, they added, if the tariff pause is extended, the Bank of Canada may opt to leave the overnight unchanged in March given the strength in GDP in late 2024 and early 2025.

In a separate preview of the jobs data, Katherine Judge said tariff uncertainty could have held back hiring plans in February, resulting in a modest 10K jobs being created and the unemployment rate ticking up to 6.7%. That would likely include layoffs in sectors that are more exposed to tariffs, including manufacturing, following a surge in hiring in the prior month. And that would be in line with the deterioration in business confidence seen in the CFIB survey during the month, and the end of the GST holiday mid-month could have put pressure on retail trade and restaurant headcounts.

On forecast implications, Judge added: "If the tariff pause is extended, the BoC is likely to leave rates unchanged in March as other activity readings on GDP and housing have looked better, and core
inflation has surprised to the upside, while the weakness has been isolated to areas impacted by tariffs which may not end up being implemented."

(Also on the CIBC calendar for next week are Q4 Labour Productivity data due out Wednesday; February IVEY PMI data due Thursday; and Q4 Capacity Utilization due out Friday.)