Canada Economics Update Bank’s next move likely to be a rate cut Although the Bank of Canada maintained its tightening bias today, the rest of its communications suggest that the Bank is growing more confident it has done enough to eventually get inflation back to... 25th October 2023 · 3 mins read
Canada Economics Update Output rapidly falling below potential The weakness of GDP growth in the second and third quarters means that the Bank of Canada is likely to make a marked re-assessment of its output gap estimates in its October Monetary Policy Report... 18th October 2023 · 3 mins read
Canada Economics Update Housing Watch (Oct.) The renewed increases in mortgage rates and new listings mean we now expect house prices to fall by 5% over the next six months. The big risk, however, is that we are underestimating the degree to... 17th October 2023 · 4 mins read
Canada Economics Update Bank’s surveys unlikely to prompt another hike The Bank of Canada’s quarterly surveys show that businesses’ inflation expectations continue to decline, albeit slowly, and point to a growing risk that the economy will fall into recession... 16th October 2023 · 4 mins read
Canada Economics Update What’s behind resurgent core inflation pressures? The recent strength of core inflation compared to that in the US is mainly due to a rebound in durable goods prices. That has little to do with demand, which has weakened to a greater extent in Canada... 11th October 2023 · 5 mins read
Global Economics Update The bond market sell-off and the global economy The sell-off in bond markets has taken a breather today, helped in part by softer data on the US labour market. However, the scale of the moves over the past week has invoked comparisons to previous... 4th October 2023 · 6 mins read
Canada Economics Update Housing Watch (Sep.) House price inflation turned positive in August, but the smaller monthly price gain combined with signs of easing demand and increasing supply show that the housing market continues to cool. 18th September 2023 · 4 mins read
Canada Economics Update Plunging food inflation to offset higher oil prices CPI food inflation has remained elevated in recent months but, with wholesale price growth easing rapidly, we are confident it will soon fall sharply. That will help to offset the impact of higher oil... 14th September 2023 · 5 mins read
FX Markets Update Rate cuts by the BoC may push the loonie lower Although the Canadian dollar has held up relatively well among G10 currencies, we think it will weaken in the coming quarters as investors discount a more dovish policy path for the Bank of Canada. In... 7th September 2023 · 3 mins read
Canada Economics Update Bank of Canada’s next move likely to be a rate cut The Bank of Canada accompanied its decision to leave interest rates unchanged with a pledge to hike again if needed, but we doubt it will need to follow through. With recession risks rising and labour... 6th September 2023 · 2 mins read
Canada Economics Update What explains the resilience of economic growth? GDP in those sectors normally most sensitive to interest rates has weakened over the past year and is now well below the pre-pandemic trend. The resilience of overall economic growth to higher... 23rd August 2023 · 5 mins read
Canada Economics Update Housing Watch (Aug.) The decline in the home sales-to-new listing ratio in July supports our forecast that house price growth will slow over the rest of the year. While housing starts remained high in July, they still... 17th August 2023 · 4 mins read
Canada Economics Update Wage growth to slow despite labour strikes Despite some recent high-profile labour strikes, it still seems likely that overall wage growth will slow sharply during the next 12 months, as labour demand cools and elevated immigration boosts... 2nd August 2023 · 2 mins read
Canada Economics Update Housing Watch (Jul.) The pick-up in existing home sales this year has spread to the pre-construction market, with new home sales in Toronto rebounding strongly. Together with the surge in housing starts in June, that... 18th July 2023 · 4 mins read
Canada Economics Update 5.0% likely to be the peak The Bank of Canada’s 25bp hike today, taking the policy rate to 5.0%, is likely to be the last in this cycle. With the labour market loosening, core inflation falling and the survey indicators... 12th July 2023 · 3 mins read
Canada Economics Update “Excess” savings unlikely to avert spending slowdown The recent US experience seems to suggest that the household saving rate could fall further as Canadians draw down the savings they built up during the pandemic, supporting consumption. A closer look... 10th July 2023 · 3 mins read
