As at January 31, 2026
| Closing 31-01-26 |
Variation 31-12-25 |
Variation 31-12-25 |
|
|---|---|---|---|
| Key interest rate in Canada (%) | |||
| Key interest rate in Canada (%) | 2.25 | 0.00 | 0.00 |
| Oil (WTI) | |||
| Oil (WTI) | $65.21 | 13.6% ▲ | 13.6% ▲ |
| Gold | |||
| Gold | $4,894.23 | 13.3% ▲ | 13.3% ▲ |
| EUR/CAD | |||
| EUR/CAD | 1.61 | 0.2% ▲ | 0.2% ▲ |
| JPY/CAD | |||
| JPY/CAD | 0.01 | 0.5% ▲ | 0.5% ▲ |
| USD/CAD | |||
| USD/CAD | 1.36 | -1.1% ▼ | -1.1% ▼ |
Sources: Bank of Canada, Bloomberg Finance L.P.
CANADIAN MARKET
0.8% (S&P/TSX Composite 31-01-2026)The Canadian market started the year well, posting a positive return and outperforming the U.S. market. Its momentum was due mainly to a strong advance by commodities, especially gold, despite the stunning selloff at month-end, in a context of heightened geopolitical tensions and a weakening U.S. dollar.
From the macroeconomic standpoint, the Canadian economy showed signs of slowing at the end of 2025. Trade uncertainties stemming from U.S. tariffs on steel, autos, lumber and aluminum continued to weigh on business investment and confidence. That said, the challenges were concentrated in those sectors, with little spillover into the broad economy.
As for monetary policy, the Bank of Canada left its key interest rate at 2.25%, contributing to a relatively stable rate environment. Against this backdrop, the Canadian bond market recorded a positive performance, with the FTSE Canada Universe Bond Index rising 0.6% in January.
U.S. MARKET
0.2% (S&P 500 31-01-2026 in CAD)In the United States, the stock market was highly volatile at the end of January, although the S&P 500 Index had a positive return on the month. The index briefly crossed the symbolic threshold of 7,000 points before falling back as investors digested political uncertainty, mixed economic data and corporate earnings announcements. The index advanced 1.5% in January, or 0.2% in Canadian dollars.
The announcement of Kevin Warsh’s appointment as Chair of the Federal Reserve revived concerns about Fed independence and the direction of monetary policy. In addition, higher-than-expected inflation data, particularly in production costs, fuelled uncertainty around the timing of the next rate cuts, which are now expected later in 2026.
The start of the earnings season gave rise to mixed reactions, especially in the case of large tech companies. Even so, investors remained optimistic about earnings growth in 2026 – a key factor holding up historically high valuations amid increased scrutiny of AI-related capital spending.
INTERNATIONAL MARKETS
4.0% (MSCI EAFE 31-01-2026 in CAD)Developed markets outside North America recorded a solid performance in January, advancing 3.2% in local currencies and 4.0% in Canadian dollars. In Europe, the equity markets continued to rise on the improving economic climate and stronger-than-expected growth in the fourth quarter of 2025. Household spending and business investment contributed to the recovery, while inflation stayed close to the European Central Bank’s target, providing a stable monetary environment.
Germany showed encouraging signs after several years of stagnation, while Spain remained an engine of growth. The outlook was also supported by plans for infrastructure and defence spending whose spinoffs are expected to increase during the year.
Japan stood out in January as one of the best-performing Asian markets. Manufacturing returned to growth as exports and business investment recovered despite persistent inflationary pressures.
EMERGING MARKETS
7.5% (MSCI Emerging Markets 31-01-2026 in CAD)Emerging markets had a standout month, recording one of their best January performances in two decades. The solid advance was supported by a weaker U.S. dollar, substantial capital flows and upward revisions to the 2026 earnings outlook. The MSCI EM Index advanced 8.8% in local currencies and 7.5% in Canadian dollars.
South Korea and Taiwan benefitted from renewed optimism linked to global demand for semiconductors and advanced manufacturing equipment. The South Korean market was especially strong, with the KOSPI, South Korea’s main stock index, rising 24% in January in local currency.
Generally speaking, January confirmed the renewed appeal of emerging markets as a source of diversification and growth for investors looking to reduce their reliance on U.S. markets.
