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
Canada Economics Update Will core inflation continue to rise? The upward trend in core inflation over the past year is as much a reflection of past weakness as current strength. Core inflation looks set to remain near 2% in the coming months before dropping back... 25th July 2018 · 1 min read
Canada Economics Update Are better times ahead for exporters? New manufacturing orders have recently risen strongly and exporters are more optimistic than they have been in years. However, there are a number of reasons to doubt that an export revival is on the... 19th July 2018 · 1 min read
Canada Economics Update Bank hikes and adopts a somewhat hawkish tone Alongside its decision to raise the key policy rate from 1.25% to 1.50%, the Bank of Canada maintained a fairly hawkish tone in its policy statement. While this suggests that the Bank intends to raise... 11th July 2018 · 1 min read
Canada Economics Update What do tariffs mean for inflation? The tariffs announced so far are unlikely to boost Canadian inflation by much more than 0.1% pt, while the effects on economic growth should also be small. We therefore doubt that they will have much... 10th July 2018 · 1 min read
Canada Economics Update NAFTA feud escalates The markets have dismissed the G7 trade spat between President Donald Trump and Prime Minister Justin Trudeau as much ado about nothing, which is understandable given the former’s infamously bellicose... 12th June 2018 · 1 min read
Canada Economics Update Bank takes a more hawkish view The Bank of Canada left its key policy rate unchanged at 1.25% today but issued a slightly more hawkish statement, which will raise expectations of a rate hike later this year. 30th May 2018 · 1 min read
Canada Economics Update Bank of Canada moving to side lines The Bank of Canada left its key policy rate unchanged at 1.25% at today's Governing Council meeting and, although the markets still anticipate a further 25bp rate hike later this year, we think the... 18th April 2018 · 1 min read
Canada Economics Update Business Outlook Survey (Q1) The latest Business Outlook Survey could unnerve the Bank of Canada since it suggests that GDP growth will slow to below potential this year, while at the same time there are clear signs of mounting... 9th April 2018 · 1 min read
Canada Economics Update Household deleveraging likely to restrain growth The small income-driven decline in the household debt-to-income ratio in the fourth quarter of 2017 provides a glimmer of hope that the economy might be able to successfully grow its way out of debt... 15th March 2018 · 1 min read
Canada Economics Update Bank of Canada won't risk further rate hikes The Bank of Canada implied in its policy statement this morning that, despite growing concerns around trade, it still believes further interest rate increases will be needed later this year. That said... 7th March 2018 · 1 min read
