Good morning. In today’s letter, we’re eyeing energy prices, tracking Tiff Macklem and following the final stretch of the U.S. midterm campaign.

Tariffs: Ottawa said it is reviewing a letter from Stelco in which the U.S.-owned steelmaker argues that proceeding with hundreds of layoffs in Canada does not violate commitments it made to the federal government.

Lending: Canadian financial institutions have landed in the crosshairs of a major nationalization debate in Britain, raising concerns among creditors over the fate of Thames Water.

Separatism: Prime Minister Mark Carney is making the case for a united Canada as Albertans prepare to vote in a referendum on the province’s place in Confederation. Quebec businesses, meanwhile, are bracing for a renewed sovereignty debate.

Deals: McCain Foods announced it is acquiring an Indian frozen food company as relations with Canada thaw.

1. Energy drain: Russia continued to strike Ukraine’s energy facilities even after U.S. President Donald Trump posted to social media that the two warring countries had agreed on an energy ceasefire.

Ukrainian President Volodymyr Zelensky said yesterday that he had learned through media reports that Trump said he secured a deal with Russia involving a mutual pause in strikes on energy sites. Zelensky said he would be willing to honour that agreement if Moscow did the same.

“We support it, but I have not heard approval of this proposal from the Russian side,” he said. The Kremlin declined to comment, according to a state news agency.

On Sunday, the Prime Minister’s Office said Carney spoke with Trump and thanked him for his efforts to broker the proposed ceasefire.

Earlier that day, however, Carney condemned a separate agreement under which Russia would supply millions of barrels of diesel to the U.S. and global markets, saying it would fund Russia’s “illegal, unjustifiable war against Ukraine” and undermine efforts to end the conflict. That’s a lot of variable geometry to calculate in one day.

2. Central intelligence: Bank of Canada Governor Tiff Macklem joins global financial leaders in Bangkok this week as central banks weigh the effects of trade disruption and high energy costs on growth and inflation.

Macklem is scheduled to speak tomorrow at the annual meeting of the Institute of International Finance, a global association of financial institutions, then joins an IMF panel Friday on the effects of artificial intelligence on productivity, employment and financial stability. Maybe they’ve figured it all out!

That certainly wouldn’t hurt right about now. While geopolitical tensions in the Middle East have kept global energy prices volatile, the IMF today projected Canada’s economy to grow by a modest 1.1 per cent this year – down from 1.5 per cent at the beginning of the year. Heightened trade uncertainty continues to weigh on domestic economic activity, the fund said.

3. ‘Everyone, take a deep breath’

The forecast finds Canada on already muddy footing. Manufacturing and wholesale figures this Thursday and home-sales data on Friday will offer sturdy measures of economic momentum after September’s unexpected loss of 68,000 jobs.

Canada has reported 110,000 job losses over the last two months, wiping out about 60 per cent of the jobs gained since May. But “the sky is not falling,” KPMG chief economist Ali Jaffery wrote in a note to clients on Friday. “Everyone, take a deep breath.”

Younger workers accounted for most of September’s decline, but represent only about 14 per cent of the labour force, Jaffery told me in an e-mail. Their job losses can have an outsized effect on the headline number without delivering a comparable hit to spending and economic growth.

Rapid population changes and difficulties measuring youth employment mean the monthly figures should be taken “with a bigger grain of salt than we have in the past,” Jaffery said. An unemployment rate of 6.5 per cent – roughly where it has held since May – is evidence against a sharp deterioration, he said.

Ahead of the BoC’s Oct. 28 decision, the jobs report nevertheless raises concerns about growth as higher energy costs threaten to prolong inflation. Macklem cautioned last month against raising rates while inflation pressures remain contained, but also against responding too slowly if those pressures become more persistent. We imagine he’ll be keen to avoid underestimating another inflation surge.

4. Worry on Wall Street ...

U.S. banks kick off third-quarter earnings season on Wall Street this week, with four of the six largest lenders reporting this morning. Profits among the big six are expected to rise by as much as 20 per cent from a year earlier. But Treasury yields have spiked as investors worry that rising inflation could prompt more Federal Reserve rate hikes, pushing borrowing costs higher and potentially weighing on lending and corporate deal-making. The KBW Bank Index, which tracks 24 major U.S. banking companies, fell about 6 per cent in the third quarter, compared with a 2-per-cent gain in the S&P 500.

5. ... anger on Main

Three weeks before the U.S. midterms, Americans are getting gloomier about the economy. Last Friday’s University of Michigan survey showed consumer sentiment