Canada Economics Weekly Bank of Canada races ahead of the pack The Bank of Canada’s second 25bp interest rate cut, taking the policy rate to 4.50%, was accompanied by a dovish shift in the communications. Our base case is that the Bank will continue to cut rates... 26th July 2024 · 5 mins read
Canada Economics Weekly CPI data just about clear path for another rate cut Despite some measures of monthly core price growth remaining above the rates consistent with 2% inflation, the June CPI release on the whole supported the case for another interest rate cut from the... 19th July 2024 · 4 mins read
Canada Economics Weekly Rate cuts will offer relief to housing this year The latest housing market data paint an almost ideal picture for the Bank of Canada, with activity improving, but little sign of a surge in house prices that could derail the downward trend in core... 12th July 2024 · 6 mins read
Canada Economics Weekly Weakness boosts odds of another rate cut There was little to be encouraged by this week, with labour market conditions continuing to soften, the business surveys weak and the real estate board data pointing to a risk of renewed falls in... 5th July 2024 · 4 mins read
Canada Economics Weekly Bank of Canada still data dependent The May CPI data were a step back after the run of soft core price readings in the first quarter. The broader evidence stills seems supportive of a July interest rate cut, but the next CPI release for... 28th June 2024 · 6 mins read
Canada Economics Weekly Bank leaves its options open The Summary of Deliberations from the Bank of Canada’s June meeting reiterated that further interest rate cuts are likely but gave little away about how quickly the Bank will move. With another two... 21st June 2024 · 6 mins read
Canada Economics Weekly Households deleveraging only slowly The household debt-to-income ratio fell again in the first quarter, albeit because incomes continued to rise at a faster pace than debt levels. Although the aggregate situation is slowly improving... 14th June 2024 · 5 mins read
Canada Economics Weekly Wage growth may still be a concern for the Bank The Bank of Canada kicked off its loosened cycle this week and the accompanying communications left the door open for another cut in July, although still-strong wage pressures are one reason why the... 7th June 2024 · 4 mins read
Canada Economics Weekly GDP data unlikely to sway the Bank The weaker-than-expected first-quarter GDP data and downward revision to fourth-quarter growth caused markets to price in a higher chance that the Bank of Canada will cut interest rates next week... 31st May 2024 · 6 mins read
Canada Economics Weekly Mission (almost) accomplished The further fall in headline inflation in April, to a three-year low of 2.6%, means the 2% target could be achieved as soon as August. Whether the Bank of Canada cuts interest rates in a couple of... 24th May 2024 · 5 mins read
Canada Economics Weekly Heading for a weaker second quarter The further evidence of softer activity this week might not be enough to persuade the Bank of Canada to cut interest rates in June, but they add to our sense that rate cuts are coming very soon. 17th May 2024 · 6 mins read
Canada Economics Weekly Bank to wait a little longer before cutting interest rates The strength of the April labour market data means we now expect the Bank of Canada to begin its loosening cycle in July, rather than June. Nonetheless, the sharp growth in labour supply and... 10th May 2024 · 4 mins read
Canada Economics Weekly Trans Mountain expansion finally completed After 12 long years, the Trans Mountain oil pipeline expansion finally entered commercial service this week. The pipeline has the potential to raise oil exports significantly, but the full boost is... 3rd May 2024 · 5 mins read
Canada Economics Weekly Data favour the doves The latest Summary of Deliberations showed division among the Governing Council about when it will be appropriate to cut interest rates. The data released since the April meeting favour the doves... 26th April 2024 · 6 mins read
Canada Economics Weekly Modest fiscal stimulus unlikely to prevent June rate cut Budget 2024 made a bit of a splash thanks to the unexpected changes to capital gains taxes, but we do not think the new net spending measures were large enough to change the outlook for GDP growth or... 19th April 2024 · 5 mins read
Canada Economics Weekly Budget unlikely to move the needle for interest rates Finance Minister Chrystia Freeland’s pledge to create the conditions needed for lower interest rates means the government is unlikely to announce much new near-term spending in Budget 2024 next week... 12th April 2024 · 6 mins read
