Canada Economics Weekly Bank signals eagerness to begin QT Although the Bank of Canada kept policy unchanged this week, its signal that it intends to start quantitative tightening soon was more hawkish than most were expecting. 28th January 2022 · 6 mins read
Canada Economics Weekly Will they, won’t they? Whether the Bank of Canada raises interest rates next week or not, the more important question now is how high will rates eventually rise? Our view is that current market pricing is too aggressive. 21st January 2022 · 4 mins read
Canada Economics Weekly Ivey PMI suggests widespread Omicron disruption The various reports this week of intense labour shortages and the slump in the Ivey PMI in December suggest that the Omicron variant is causing widespread economic disruption. 14th January 2022 · 6 mins read
Canada Economics Weekly Omicron a new type of challenge for labour market The Omicron wave will be characterised more by heightened absenteeism from work than previous waves. This raises the risk that the hit to activity will be larger than current restrictions alone might... 7th January 2022 · 4 mins read
Canada Economics Weekly Strong Q4 but growing downside risks to Q1 The activity data released this week suggest that the economy was in a strong position in the fourth quarter and the price data imply that inflationary pressures are broadening. The surge in... 17th December 2021 · 6 mins read
Canada Economics Weekly Bank growing more concerned about cost pressures The Bank of Canada’s increased concerns about wage and cost pressures suggest it will start to tighten policy in April, especially if the government loosens fiscal policy in next week’s fall fiscal... 10th December 2021 · 7 mins read
Canada Economics Weekly Bank to hike sooner as labour market nears full health As the labour market is nearing a full recovery and wages are rising strongly, we now expect the Bank to hike interest rates in April, rather than waiting until July, as we previously expected. 3rd December 2021 · 5 mins read
Canada Economics Weekly Canada avoids winter wave, but new variant a threat Winter is coming but, unlike Europe and the US Midwest too, Canada hasn’t seen a new wave of coronavirus infections. The emergence of a new potentially more-virulent coronavirus strain in South Africa... 26th November 2021 · 5 mins read
Canada Economics Weekly House prices surge, floods devastate BC The renewed surge in house prices could persuade the Bank of Canada to raise interest rates sooner than we forecast, although the hit to activity from the devasting floods in BC this week reduces the... 19th November 2021 · 4 mins read
Canada Economics Weekly Upside risks to October inflation lower than in the US The upside surprise to consumer price inflation in the US in October suggests there are also further upside risks in Canada, although the data next week are unlikely to show as large an increase in... 12th November 2021 · 7 mins read
Canada Economics Weekly Supply a problem for manufacturers not homeowners The survey-based evidence of elevated orders backlogs and the news that both imports and exports slumped in September illustrate the impact that global supply shortages are having on industry. But... 5th November 2021 · 3 mins read
Canada Economics Weekly Market pricing too aggressive despite hawkish Bank Following the Bank of Canada’s hawkish message this week there is a risk that it raises interest rates sooner than we anticipate. Nevertheless, we continue to doubt that the Bank will hike by as much... 29th October 2021 · 6 mins read
Canada Economics Weekly Economic growth to disappoint as CRB ends The winding down of government support to households and firms means the economy faces a large fiscal contraction this quarter, which we think will cause GDP growth to disappoint. 22nd October 2021 · 5 mins read
Canada Economics Weekly Higher oil prices not a game-changer for the Bank We are not convinced that the further rise in oil prices this week will be sustained. Even if we are wrong, we doubt that higher oil prices will cause the Bank of Canada to become much more hawkish. 15th October 2021 · 5 mins read
Canada Economics Weekly Heading off a fiscal cliff? There have been rumours this week that the government will extend some of the emergency spending measures that are soon due to expire. They are unlikely to be extended in their current generous form... 8th October 2021 · 5 mins read
Canada Economics Weekly CMHC sounds the alarm (again) It’s hard to argue against the Canada Mortgage and Housing Corporation’s (CMHC) latest warning that house prices look vulnerable to a correction. Indeed, we expect prices to fall in several cities by... 1st October 2021 · 6 mins read
