Canada Economics Weekly Resilient labour market may force Bank to do more The resilience of the labour market is a risk to our view that the Bank of Canada will pause its tightening cycle after a final 25 bp hike this month, even as the slump in natural gas prices raises... 6th January 2023 · 4 mins read
Canada Economics Weekly Strong services inflation keeps pressure on the Bank The November CPI data were a mixed bag, with deflationary pressure on goods starting to feed through but strong price rises for several key services. The 3-month annualised measures of core inflation... 23rd December 2022 · 6 mins read
Canada Economics Weekly Household net worth squeezed further One third of the rise in household net worth during the pandemic has now been reversed and the further fall in house prices in November points to another deterioration this quarter. Lower net worth... 16th December 2022 · 7 mins read
Canada Economics Weekly Bank’s latest hike puts further pressure on housing The Bank of Canada’s 50bp rate hike this week means that variable mortgage rates are now more than 400bp higher than the start of the year. This raises the risk that some will be forced to sell their... 9th December 2022 · 5 mins read
Canada Economics Weekly GDP revisions unlikely to change things for the Bank The national accounts data provided two pieces of good news this week, with revisions to the historical series and stronger-than-expected third-quarter growth leaving GDP higher than expected. While... 2nd December 2022 · 5 mins read
Canada Economics Weekly Trigger warning Research from the Bank of Canada suggests that half of all variable-rate, fixed-payment mortgage holders have now hit their so-called trigger rates, which means their payments will rise. This is one... 25th November 2022 · 6 mins read
Canada Economics Weekly October CPI data offer some encouragement Although the data this week showed renewed rises in the annual rates of CPI-trim and CPI-median inflation in October, our calculations show that the timelier 3-month annualised measures both declined... 18th November 2022 · 5 mins read
Canada Economics Weekly Bank wants to see rise in unemployment Bank of Canada Governor Tiff Macklem said this week that the unemployment rate will need to rise to help restore price stability, but he also played down the significance of the strong gains in... 11th November 2022 · 6 mins read
Canada Economics Weekly Bank’s dovish tilt looking premature The modest fiscal loosening unveiled in the Fall Economic Statement this week is unlikely to move the needle much for monetary policy, but the surge in employment in October and the acceleration in... 4th November 2022 · 4 mins read
Canada Economics Weekly Recession a line in the sand for the Bank The Bank of Canada now judges that there is a 50/50 chance of GDP growth turning negative, which caused it to slow the pace of its tightening to a 50 bp hike this week and to hint that it will drop to... 28th October 2022 · 6 mins read
Canada Economics Weekly Policy rate heading toward 5% The data released this week showed that higher interest rates are yet to have much of a negative impact on construction or consumption and that core inflation is proving stickier than anticipated... 21st October 2022 · 5 mins read
Canada Economics Weekly Canada avoids UK-style market fallout Canada is unlikely to succumb to the same crisis currently afflicting UK markets, but those problems are a reminder that rapidly rising interest rates have a habit of breaking things. In Canada’s case... 14th October 2022 · 7 mins read
Canada Economics Weekly Pivot, pause, tilt? Not yet, despite likely recession The hawkish speech from Governor Tiff Macklem this week suggests that the Bank of Canada has no intention of following the Reserve Bank of Australia in dropping down to a 25 bp hike at its next... 7th October 2022 · 5 mins read
Canada Economics Weekly Record immigration won’t make the Bank’s job easier The accepted wisdom is that strong immigration reduces the pressure on the Bank of Canada to raise interest rates, as it will eventually help to ease labour shortages. But the immediate impact has... 30th September 2022 · 6 mins read
Canada Economics Weekly Hawkish Fed forces the Bank to do more The hawkish message from the Federal Reserve this week has prompted us to revise up our forecast for the peak policy rate in Canada to 4.0%, even as the latest data suggest that inflationary pressures... 23rd September 2022 · 5 mins read
Canada Economics Weekly Peak rates likely to be lower in Canada We still expect the peak in interest rates to be markedly lower in Canada than the US, as household debt is a lot higher, labour market conditions are weaker and there is scope for a much bigger drop... 16th September 2022 · 6 mins read
