07:53 AM EDT, 04/07/2025 (MT Newswires) -- In Canada, the focus this week will be on the Q1 Bank of Canada Business Outlook Survey (BOS) conducted during February, said RBC.

The BoC will release the Q1 BOS and Canadian Survey of Consumer Expectations (CSCE) at 10:30 a.m. ET Monday.

The BOS asked key questions on business sales outlook, capacity constraints, investment and hiring intentions as well inflation expectations amid escalating trade tensions, noted the bank.

Indeed, the Q1 results will likely be a stark contrast to the last iteration in Q4 when business sentiment was buoyed by large and consecutive interest rate cuts from the BoC and early signs of a recovery in domestic demand toward the end of last year. RBC expects the near-term outlook dimmed while businesses scaled back hiring and investment plans, especially for those in the trade-exposed manufacturing industries.

Businesses' expectations for input cost and inflation pressures likely both rose, mirroring the early survey released alongside the last BoC interest rate announcement that showed plans among businesses to pass on a large chunk of tariff-related cost increases to consumers, stated the bank.

Moving forward, the BoC and U.S. Federal Reserve will be watching trends on inflation, expectations and business pricing behavior -- expected frequency and size of future price adjustments -- very closely to ensure tariff-related price increases don't turn into continuing high inflation, added RBC.