Canada Economics Update Markets jumping the gun on Bank of Canada rate hikes We think market participants are getting ahead of themselves by pricing in an interest rate hike from the Bank of Canada in 2022, particularly as Governor Tiff Macklem again signalled yesterday that... 24th February 2021 · 3 mins read
Canada Economics Update Housing market to lose momentum as bond yields rise Record low inventory should continue to drive strong house price gains in the first half of the year, but we expect house price inflation to slow beyond then as bond yields and mortgage rates start to... 17th February 2021 · 2 mins read
Canada Economics Update Easing of restrictions to gradually lift employment The easing of the coronavirus restrictions will support a rebound in employment, but the recovery is likely to be slow going for the next few months due to limited progress with vaccinations. 10th February 2021 · 2 mins read
Canada Economics Update Natural resources sector to offset weakness elsewhere The natural resources sector looks set to recover sooner than we previously thought, which should help to prevent GDP from falling in the first quarter despite the coronavirus restrictions and vaccine... 3rd February 2021 · 3 mins read
Canada Economics Update Bank unlikely to pull forward rate hike plans The Bank of Canada has signalled that it will wait until 2023 to raise interest rates and, despite our stronger forecasts for GDP growth, there are a few reasons why we expect it to stick to this... 28th January 2021 · 3 mins read
Canada Economics Update Bank hints at QE taper this year The main change to the Bank of Canada’s policy statement today was a signal that the pace of its bond purchases will be reduced as the Governing Council gains confidence in the strength of the... 20th January 2021 · 3 mins read
Canada Economics Update House prices to rise further in 2021 The wide range of forecasts for house prices in 2021 shows that there is still a lot of uncertainty ahead. Nevertheless, given strong demand and low mortgage rates, our view is that prices will... 6th January 2021 · 3 mins read
Canada Economics Update Ten potential surprises for Canada in 2021 It is not just a strong recovery that could surprise some market participants in 2021; a change to the Bank of Canada’s mandate, a snap election, and several other events could also alter the economic... 21st December 2020 · 4 mins read
Canada Economics Update Inflation to be above 2% for most of 2021 Recent developments suggest that inflation will recover more strongly in 2021 than we previously thought. We now expect inflation to be above 2% for most of the year, before dropping back in 2022. 17th December 2020 · 4 mins read
Canada Economics Update Bank will probably stick to implicit yield curve control The key change to the Bank of Canada’s policy statement today was its commitment to “keep interest rates low across the yield curve”. This is in line with our view that, even as the economy rebounds... 9th December 2020 · 3 mins read
Canada Economics Update Economy to recover strongly after weak end to 2020 The recovery is set to go into reverse in December amid the latest coronavirus restrictions, and we now think GDP will stagnate over the first quarter. But the high effectiveness of the first COVID-19... 2nd December 2020 · 3 mins read
Canada Economics Update Government plans investment of up to 4.3% of GDP The government announced today that it expects to spend an additional $50bn this fiscal year to combat the damage from the second wave of the coronavirus. It also laid out plans for an investment... 30th November 2020 · 3 mins read
Canada Economics Update Spending to underperform, but only in the near term Retail sales are likely to fall further behind those in the US amid the latest coronavirus-related restrictions, particularly because the Canadian data do a worse job at capturing online sales... 26th November 2020 · 3 mins read
Canada Economics Update “Circuit breaker” lockdowns the key risk to activity The high-frequency data suggest the targeted restrictions imposed last month have not weighed much on broader activity, but worsening COVID-19 outbreaks raise the risk that “circuit breaker” lockdowns... 19th November 2020 · 4 mins read
Canada Economics Update Vaccine could reduce size of further fiscal support The rollout of an effective vaccine in early 2021 would cause us to pull up our growth forecasts for next year, but the boost to GDP in 2022 could be much smaller if the improved near-term outlook... 10th November 2020 · 4 mins read
Canada Economics Update Easing of restrictions may not last The imminent easing of restrictions in Ontario is another reason to think that GDP will keep rising in the fourth quarter, but there is clearly a significant chance that restrictions will be reimposed... 5th November 2020 · 3 mins read
