Canada Economics Update Inflation to be above 3% for most of the year We now expect inflation to surpass the upper limit of the Bank of Canada’s 1% to 3% range for most of the rest of the year, but we continue to think that it will drop back to less than 2% in 2022. 13th May 2021 · 4 mins read
Canada Economics Update Higher commodities prices another tailwind to growth The further strong rises in commodity prices present upside risks to our GDP forecasts, although the boost to growth is likely to be smaller than during previous periods of strong commodity price... 6th May 2021 · 4 mins read
Canada Economics Update Childcare plan could raise potential GDP growth The proposed national preschool system could increase the labour force, and therefore potential GDP, by 1.2%, but the impact will be spread over many years and might be dwarfed by changes to... 28th April 2021 · 4 mins read
Canada Economics Update Bank trims asset purchases, may hike in late 2022 The Bank of Canada’s decision to trim its asset purchases and pull forward its guidance on interest rates confirms that it has become more upbeat about the economic outlook. We expect it to bring its... 21st April 2021 · 3 mins read
Canada Economics Update Government sets out stimulus worth 4.4% of GDP The additional stimulus outlined in today’s Budget was in line with our expectations and, while a few of the proposals will raise eyebrows, the total package should help to support a strong economic... 19th April 2021 · 3 mins read
Canada Economics Update House prices vulnerable to higher interest rates House prices look increasingly vulnerable to future rises in interest rates. While the economy coped well the last time the Bank of Canada’s rate hikes shook the housing market in 2017 and 2018, the... 13th April 2021 · 4 mins read
Canada Economics Update Bank to cut the pace of its asset purchases next month The Bank of Canada seems to have signalled that it will reduce the pace of its government bond purchases at its next meeting in April. We now expect it to bring its net purchases to zero by the end of... 23rd March 2021 · 3 mins read
Canada Economics Update Bank unlikely to flinch as inflation moves above target We expect inflation to hit 3.5% in April and then to sit at the upper end of the Bank of Canada’s 1% to 3% target range for most of the rest of the year. Given the likelihood that inflation will drop... 18th March 2021 · 4 mins read
Canada Economics Update Bank remains committed to keeping yields low The Bank of Canada adopted a more upbeat tone in its latest policy statement but, given the slow vaccination program and the Bank’s concerns about the labour market, we doubt this is a signal that it... 10th March 2021 · 3 mins read
Canada Economics Update Broader labour market indicators still weak While labour market conditions are probably not quite as strong as the Labour Force Survey (LFS) measure of employment suggests, they do not seem to be as weak as the Survey of Payrolls, Employment... 9th March 2021 · 4 mins read
Canada Economics Update We expect oil to be the key driver for the loonie Given our latest forecast for oil prices, we now expect the Canadian dollar to rise further in 2021 than we previously thought, but to drop back a bit in 2022. 25th February 2021 · 2 mins read
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
