Strong employment numbers on both sides of the border and a continued boost from their international footprints will likely result in a “solid” quarter for Canadians banks.

Analysts estimate Canada’s six biggest banks will see modest earnings-per-share growth in the quarter which ended July 31 in the range of 6-7% year-over-year amid tariff talk, U.S.-China tensions, and other headwinds.

But all ears will be on commentary from bank executives on their outlooks for the remainder of the year, with the US Federal Reserve’s cut to interest rates last month for the first time since the global financial crisis expected to eat into their profit margins.

During the previous quarter, the top six banks delivered a mix of hits and misses, but still grew net income collectively by roughly 7% from the previous year, helped by their international businesses.

The contribution from outside Canada’s borders is expected to be a positive factor this quarter as well.

US and international personal and commercial banking earnings growth is forecast to increase by 16% year-over-year, on average, Darko Mihelic, an analyst with RBC Capital Markets, said in a note to clients.

That will help to offset slower domestic personal and commercial banking growth, which Mihelic forecasts at 3.8% across the sector in the third quarter, year-over-year.

Another element will be expenses, which have been an important headwind, said Gabriel Dechaine, an analyst with National Bank of Canada Financial Markets.

The average Big Six bank has reported 6% expense growth during the first half of this financial year, while top-line revenues increased just 5%, he said in a note to clients.

“Unsurprisingly, four of the banks have guided to lower second-half expense growth as a primary means to improve bottom line performance (and to achieve positive operating leverage),” Dechaine said.

All eyes will be on credit quality again this quarter as well.

Earlier this year, a Veritas analyst urged investors to reduce their exposure to Canadian banks ahead of an “acceleration of credit losses.” Steve Eisman, the US portfolio manager featured in “The Big Short”, also reiterated his bet against the country’s biggest lenders, pointing towards the real estate sector and noting that Canada hasn’t had a credit cycle in roughly three decades.

However, while domestic mortgage growth in the wake of tighter mortgage lending rules introduced at the beginning of 2018 has slowed, it remains in the mid-single digit range and employment is robust.

Nevertheless, the US Fed’s recent interest rate cut and the possibility of the Bank of Canada cutting rates in early 2020 are going to weigh on the banks` profit margins going forward.