Canada Economics Update Bank to cut the pace of its asset purchases next month The Bank of Canada seems to have signalled that it will reduce the pace of its government bond purchases at its next meeting in April. We now expect it to bring its net purchases to zero by the end of... 23rd March 2021 · 3 mins read
Canada Economics Weekly Vaccinations set to ramp up While the government hinted this week that the vaccination program could be completed before the target of September, the threat of vaccine nationalism elsewhere means that, with Canada reliant on... 19th March 2021 · 4 mins read
Canada Data Response Retail Sales (Jan.) The fall in retail sales in January was smaller than first indicated and the preliminary estimate for February suggests that, as lockdowns were lifted, most of the decline over the prior two months... 19th March 2021 · 2 mins read
Canada Economics Update Bank unlikely to flinch as inflation moves above target We expect inflation to hit 3.5% in April and then to sit at the upper end of the Bank of Canada’s 1% to 3% target range for most of the rest of the year. Given the likelihood that inflation will drop... 18th March 2021 · 4 mins read
Canada Data Response Consumer Prices (Feb.) The modest rise in inflation to 1.1% in February is set to be followed by much sharper increases to more than 2% this month and to more than 3% in April, as energy inflation surges. 17th March 2021 · 2 mins read
Canada Data Response Manufacturing Sales (Jan.) The manufacturing sector made a strong start to 2021, despite the major disruption to the auto industry from the global microchip shortage, as sales across the natural resource sectors rose sharply. 15th March 2021 · 2 mins read
Canada Economics Weekly Bank to upgrade forecasts in April The Bank of Canada looks set to upgrade its GDP forecasts in April, but we would be surprised if it turned much more hawkish with regards to policy. 12th March 2021 · 7 mins read
Canada Data Response Labour Force Survey (Feb.) The strong rebound in employment in February almost fully made up for the losses in December and January. While the pace of gains is now likely to slow, employment should continue to rise as the... 12th March 2021 · 3 mins read
Canada Economics Update Bank remains committed to keeping yields low The Bank of Canada adopted a more upbeat tone in its latest policy statement but, given the slow vaccination program and the Bank’s concerns about the labour market, we doubt this is a signal that it... 10th March 2021 · 3 mins read
Canada Economics Update Broader labour market indicators still weak While labour market conditions are probably not quite as strong as the Labour Force Survey (LFS) measure of employment suggests, they do not seem to be as weak as the Survey of Payrolls, Employment... 9th March 2021 · 4 mins read
Canada Economics Weekly Economy more reliant than ever on housing The fourth-quarter national accounts showed that residential investment now accounts for a record share of GDP. While some say this is a sign that tighter policy will soon be needed, we doubt the Bank... 5th March 2021 · 4 mins read
Canada Data Response International Trade (Jan.) The 8.1% m/m surge in exports in January was partly due to temporary factors but, amid strong global demand for commodities, exports are doing better than we expected a few months ago. 5th March 2021 · 2 mins read
Bank of Canada Watch Bank to turn forward guidance up to eleven Although the economy has been stronger than expected, we doubt that the Bank of Canada is about to become more hawkish. Instead, we think the Bank will use its policy statement next week to double... 3rd March 2021 · 7 mins read
Canada Data Response GDP (Q4) The 9.6% annualised gain in fourth-quarter GDP was three times as strong as the consensus forecast from just a couple of months ago. The preliminary estimate that GDP grew by 0.5% m/m in January... 2nd March 2021 · 2 mins read
Canada Economics Weekly Bank likely to talk rate expectations back down The surge in yields this week occurred despite another signal from the Bank of Canada that it plans to keep interest rates at rock-bottom levels for a long time. This has led to suggestions that the... 26th February 2021 · 6 mins read
Canada Economics Update Markets jumping the gun on Bank of Canada rate hikes We think market participants are getting ahead of themselves by pricing in an interest rate hike from the Bank of Canada in 2022, particularly as Governor Tiff Macklem again signalled yesterday that... 24th February 2021 · 3 mins read
