The Globe and Mail is reporting that two senior government sources told that the Canadian Prime Minister Carney is set to announce today that his government will increase defence spending to meet NATO's 2% target this fiscal year. This would be not only ahead of any previously announced schedule but will also be the largest increase in defence spending since the World War II.

This might also be part of the US-Canada trade negotiations as we had reports of a possible trade deal before the G7 meeting on June 15. I think, the market might be underestimating the inflation risk coming from the global monetary easing and increased fiscal spending.

Source: Forex Live