Morning. In focus this week, we’re ringing up this morning’s consumer price index, playing armchair central banker and wheeling back into BlackBerry earnings.

Energy: The federal government will announce today that its nuclear strategy aims to have 10 new large-scale reactors built in Canada.

Automaking: Contract negotiations between Ford Motor Co. and Unifor begin today against a backdrop of automotive tariffs and questions about the future of the North American trade agreement.

Defence: Canada has signed an agreement with Australia for a $2.5-billion over-the-horizon radar system to track potential threats entering Canadian airspace in the North.

1. Price check: Canada’s annual inflation rate might have climbed above 3 per cent in May, a bump expected in Statistics Canada’s report later this morning. That follows a 2.8 per cent rate in April, which was the highest level the country has seen in nearly two years.

The primary driver of the recent pickup is rising energy costs – specifically gasoline prices driven by continuing conflicts in the Middle East.

But food price inflation, which slowed from 4 per cent in March to 3.5 per cent in April, is expected to show signs of speeding back up to 3.8 per cent in the upcoming May report. Wrong way, food!

2. Rockets and feathers: Geopolitical volatility keeps the energy outlook highly unpredictable. While global oil futures fell last week on news of a newly signed U.S.-Iran peace deal, persistent ground conflict continues to rattle the markets.

High-level negotiations in Switzerland seeking a permanent stop to the Iran war have ended, mediators said early on Monday, while technical talks will go on for the rest of the week.

Recent Israeli military strikes on Hezbollah targets in Lebanon have raised fears that the broader diplomatic breakthrough could fall apart. The fighting could keep actual physical supplies tight, dampening any remaining expectations of a quick return to pre-war oil prices.

While traders can pivot instantly on headlines, relief at the pump takes far longer because physical barrels move much more slowly than their digital counterparts. And gas stations historically raise prices like rockets when crude costs spike but lower them like feathers to protect their margins when oil finally slides.

3. Governing the unknown: On Wednesday, the Bank of Canada’s summary of deliberations from the Governing Council’s most recent meeting will show what led to their decision to hold its key interest rate at 2.25 per cent.

The summary will highlight how central bank policymakers are weighing the energy shock, a soft domestic economy and uncertainty around U.S. trade policies. In one interaction with media last week, U.S. President Donald Trump said the following about the United States-Mexico-Canada Agreement, which is up for mandatory review in July:

• “We do better without that agreement.”
• “I would rather not have the agreement but I may sign it.”
• “I view it as possibly expiring immediately.”

Alrighty then. Negotiations will undoubtedly extend past the July 1 deadline to preserve the core “pillars” of the continental trade pact – as senior U.S. trade officials describe them – and could result in a cycle of rolling annual reviews while long-term extension talks continue. (There’s a reasonable likelihood that nothing will be resolved until after Trump leaves office, Mark Rendell and Steven Chase write).

The bank isn’t really positioned to account for political unknowns, and it’s mostly looking past immediate, war-driven pocketbook strains.

“Energy prices have continued to drive headline inflation higher, but there’s nothing the BoC can do about global oil prices,” RBC economists Nathan Janzen and Abbey Xu wrote in a note to clients on Friday.

The central bank would be far more concerned about a broadening of price pressures beyond directly impacted energy prices, the economists wrote. But underlying measures, which strip out volatile food and fuel shocks, have been clinging closer to the bank’s 2 per cent inflation target. The BoC’s next rate decision is on July 15.

4. Before the bell

» Vroom: BlackBerry’s first-quarter results will mark its first update since chief executive John Giamatteo declared the company’s two-year restructuring officially over. After turning a surprise profit last quarter, management is pitching BlackBerry as a revived growth company.

BlackBerry’s embedded QNX software is cementing the company’s position as the dominant player in the expanding automated and driver-assisted vehicle market, ending last year with a record $950-million backlog in future royalties. Investors have driven up the company’s stock more than 100 per cent this year.

Maybe it’s just my algorithm, but flip phones seem to be mounting a comeback. If a hardware maker wants a guaranteed win, pair a curated business brief with a real keyboard. Let’s call it BB² and start counting the money.

» Vroom: High pump prices are expected to drive strong results for Alimentation Couche-Tard Inc. later today as consumers adopt more frequent, smaller refuelling habits – a sign households are having trouble managing bills from week to week.

5. Boom or bust: Canada’s upcoming April Survey of Employment, Payrolls and Hours takes the stage on Thursday as economists look to see if it laid the groundwork for May’s surprise 88,000 hiring boom.