Canada Economics Update Fall update fiscal projections too upbeat In his fall budget update, Finance Minister Bill Morneau more than used up the revenue windfall from stronger GDP growth and higher oil prices this year to increase incentives for business investment... 22nd November 2018 · 1 min read
Canada Economics Update Oil price slump won’t cause repeat of 2015 Recent declines in oil prices will not by themselves cause a repeat of the 2015 economic slump. But they are a reason to doubt that the Bank of Canada will raise interest rates repeatedly. 14th November 2018 · 1 min read
Canada Economics Update Income growth past its peak While the recent data paint contrasting pictures about the pace of wages and salaries growth, there are fundamental reasons to think that it has slowed over the second half of 2018. 13th November 2018 · 1 min read
Canada Economics Update Consensus too optimistic on the loonie With investors already pricing in three more rate hikes from the Bank of Canada, it’s hard to see much support for the consensus view that the Canadian dollar will rise by 5% from here. We think that... 5th November 2018 · 1 min read
Canada Economics Update Bank’s hawkish message points to next hike in January By replacing its pledge to raise rates at a “gradual” pace with an indication that it intends to hike by at least as much as, if not more than, markets expect, the Bank of Canada today struck a... 24th October 2018 · 1 min read
Canada Economics Update Business Outlook Survey (Q3) The Bank of Canada’s latest Business Outlook Survey shows that growing capacity constraints are boosting investment intentions, which will reinforce expectations that the Bank will raise interest... 15th October 2018 · 1 min read
Canada Economics Update Will the Bank raise rates by another 100bps? Based on our forecast for economic growth to slow, there is little prospect of the Bank of Canada raising interest rates by another 100bps over the next year. Even if the economy maintained its recent... 10th October 2018 · 1 min read
Canada Economics Update Energy investment unlikely to surge The recent run-up in oil prices, yesterday’s announcement of a new massive LNG project and the coming expansion in the capacity to export crude oil by rail all seem to bode well for energy investment... 3rd October 2018 · 1 min read
Canada Economics Update New trade deal unlikely to prevent 2019 slowdown While the macroeconomic implications of replacing NAFTA with USMCA are minor, the diminished risk of US auto tariffs is good news for the Canadian economy. The effective removal of that threat could... 1st October 2018 · 1 min read
Canada Economics Update Bank likely to raise interest rates in October While the Bank of Canada left its interest rates unchanged today it appears to be heading for a hike in October, although a serious breakdown in the NAFTA negotiations could result in a last minute... 5th September 2018 · 1 min read
Canada Economics Update US-Mexico trade deals shows compromise is possible Today’s announcement of a bilateral trade agreement is definitely good news for Mexico and the US, but could be good or very bad for Canada. More generally, it illustrates that, despite the Trump... 27th August 2018 · 1 min read
Canada Economics Update Inflation to drop back towards 2% Headline inflation might surpass 3% in August, but by the end of the year it is likely to be little more than 2%. And with core inflation stable, the Bank is unlikely to pick up the pace of its... 21st August 2018 · 1 min read
Canada Economics Update Loonie to depreciate even if NAFTA deal is reached A quick NAFTA deal is an upside risk to our forecast for the loonie to remain near its current rate against the US dollar this year. But our forecasts for various commodity prices to decline and... 13th August 2018 · 1 min read
Canada Economics Update Construction to drag down GDP growth Despite the recent stabilisation of some housing market indicators, steep falls in new home sales this year imply that construction activity will drop sharply over the coming 12 months. 9th August 2018 · 1 min read
Canada Economics Update Economy’s recent strength unlikely to be sustained The economy’s strength towards the end of the second quarter is partly a bounce-back from earlier weakness and is therefore unlikely to be sustained. While the growing chance of a NAFTA deal being... 7th August 2018 · 1 min read
Canada Economics Update PMI points to upside risks to growth and inflation Markit’s July PMI survey suggests that both GDP growth and inflation could increase to around 4% in the coming months. We doubt that either will rise that high, but the risks to the outlook seem to... 1st August 2018 · 1 min read