RBC Global Insight: May 2025
I am pleased to share the latest investment strategy report from RBC Wealth Management—Global Insight, which provides our current thoughts on asset classes, the economy, and timely issues that impact investment strategy.
Imbalancing Act
Having one country—the U.S.—run up debts acting as the buyer of last resort for foreign country production is not sustainable in the long term. Identifying the problem is easier than fixing it, however, and we see no easy escape for the U.S. from the trade imbalances created over the last four decades.
Global equities: Either/or …
Markets are at a crossroads, faced with potential catalysts that could cause the investor mindset to shift in either direction. For now, our investment policy remains set at “invested but watchful.”
Global fixed income: Seeing through the fog
Tariff and trade war uncertainties make it difficult to know what is in store for the future. We look through the fog with a focus on rates, central banks, and what might come next for markets and investors.
Canada and the Tariffs Trade Tiff
Advice Event - Hosted by RBC Wealth Management
Wednesday, May 21, 2025
11:00am – 11:30am PST
Virtual Advice Event – Register Here
Join us for an exclusive webinar featuring Eric Lascelles, Chief Economist, RBC Global Asset Management Inc., who will discuss the impact of the tariffs on trade, inflation and growth. Hosted by RBC PH&N Investment Counsel’s Chief Investment Strategist, Tasneem Azim-Khan, the event will also explore:
- The outlook for economic growth in Canada post-election and post-Liberation Day
- Should we be worried about a recession in the U.S.?
- How the role for central bankers has become more complicated
Canada’s path ahead
Six economic challenges facing the new federal government
Canada is at crossroads. It’s facing a shifting relationship with its main economic partner, a reawakening to its forgotten growth potential and questions about its place in a new and developing global supply chain. All of this is happening amidst a likely painful slowdown in growth in the coming year. And, landing into this maelstrom of economic change is a new government.
It’s too early to fully assess how a new government will impact Canada’s economy in the short and long term. Indeed, platforms are not the same as enacted policies. As a starting point, however, we should begin with where the main economic challenges will be. This article explores key areas worth highlighting.
Trade war backlash: Where are Canadians vacationing now? (Audio)
The trade war is changing travel plans. As tensions simmer, Canadians’ trips to the U.S. dropped substantially in early 2025 compared to last year. But vacations weren’t canceled altogether—Canadians are just going somewhere else. And, this trend of traveling less to the U.S. isn't unique to Canada – arrivals to the U.S. from other countries have also slumped this year.
In this episode of the 10-Minute Take, RBC economists Claire Fan and Carrie Freestone explore:
- How travel patterns have changed in 2025 to reflect broader trade tensions.
- Whether tourism within Canada will rise to offset international declines.
- How these trends may impact the services sector’s outlook and trade deficits.
Listen to the newest episode here or wherever you get your podcasts.
Canada’s Housing Market Update
Canada’s housing markets crack under weight of trade war
The trade war is taking an increasing toll on Canada’s housing markets as potential economic fallout weighs heavily on the minds of prospective homebuyers. Southern Ontario and parts of British Columbia—the country’s least affordable areas—are seeing sharper pullbacks in activity and weakening home prices as a result.
The U.S. sparing Canada additional tariffs in April could lift some of the fog that’s been eroding market confidence and holding back activity. However, we don’t see a meaningful rebound as long as trade uncertainty lingers.
Market Volatility Hub
What to do when markets are volatile
Market volatility is an inevitable part of investing. Geopolitical events, like the invasion of Ukraine, trade tensions and changes in interest rates are some of the many reasons that cause markets to fluctuate, sometimes drastically.
When markets shift, particularly when they drop quickly, it can be hard not to react. But history shows you will more likely achieve your long-term investment goals if you have a plan and stick to it through all types of market conditions. This may sound easy, but investors have been put to the test in recent times. Veering off course from a carefully thought-out plan can have long-reaching consequences. It can turn a temporary loss of confidence into a realized loss on an investment portfolio.
Complimentary Second Opinion Service
Helping your family build, manage and protect your wealth
If you’re a successful entrepreneur, part of a large family, or a high net-worth retiree/pre-retiree, you may have to manage financial issues that others don’t; This could include inheritances, assets in trust, complex tax planning, or a family vacation property. Perhaps you’d like to put your finances into greater context with your family’s savings, estate and business planning goals. Whatever your personal situation, we are here to help, with a comprehensive review that can ensure your wealth remains “all in the family.”
Our review process typically looks at both your investment portfolio and your overall wealth planning. This way, we can assess your financial situation in the context of your personal tax situation, savings goals, the time you have to invest and other factors such as your insurance coverage or charitable intentions.
This information is not investment advice and should be used only in conjunction with a discussion with your RBC Dominion Securities Inc. Investment Advisor. This will ensure that your own circumstances have been considered properly and that action is taken on the latest available information. The information contained herein has been obtained from sources believed to be reliable at the time obtained but neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers can guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers is to be under any responsibility or liability whatsoever in respect thereof. The inventories of RBC Dominion Securities Inc. may from time to time include securities mentioned herein. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. *Member-Canadian Investor Protection Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth Management, a business segment of Royal Bank of Canada. ®Registered trademarks of Royal Bank of Canada. Used under licence. © 2022 RBC Dominion Securities Inc. All rights reserved.