Canada Data Response Consumer Prices (Mar.) The surge in inflation in March was much larger than the Bank of Canada expected and suggests it will follow its 50 bp interest rate hike last week with another similar-sized move at its next meeting... 20th April 2022 · 3 mins read
Canada Economics Weekly Households vulnerable to higher rates The Bank of Canada embraced a new-found hawkishness this week, hiking its policy rate by 50bp to 1.00% and announcing an almost immediate start to what amounts to a relatively more aggressive... 14th April 2022 · 5 mins read
Canada Data Response Manufacturing Sales (Feb.) The 4.2% m/m rebound in manufacturing sales in February was much better than we were expecting, as firms continued to boost production even though the blockade at the key Ambassador Bridge border... 14th April 2022 · 2 mins read
Canada Economics Update Bank in hawkish mode The Bank moved into full-blown hawkish mode today, hiking its overnight policy rate by 50bp to 1.00% and announcing that quantitative tightening will start later this month, with no caps on the value... 13th April 2022 · 3 mins read
Canada Economics Weekly Following 2022 budget, attention turns to the Bank The government used its 2022 Budget to set out a host of proposals to make housing more affordable for Canadians, but the impact of these measures on house prices will be far overshadowed by the... 8th April 2022 · 5 mins read
Canada Data Response Labour Force Survey (Mar.) Another solid rise in employment drove the unemployment rate down to a 48-year low of just 5.3% in March, but the still-muted pace of wage growth suggests the Bank of Canada may not need to tighten... 8th April 2022 · 2 mins read
Canada Economics Update Budget 2022 unlikely to move the needle for the Bank The government announced a smorgasbord of new policies in the 2022 Budget, but the total increase in the budget deficit, at just $7bn, was arguably far lower than some feared. Moreover, as most of the... 7th April 2022 · 3 mins read
Bank of Canada Watch A “forceful" 50 bp hike and the start of QT We now anticipate that the Bank of Canada will raise its policy rate by 50 bp next week and announce the start of quantitative tightening. Nonetheless, we remain sceptical of the view priced into... 6th April 2022 · 7 mins read
Canada Data Response International Trade (Feb) The goods trade surplus unexpectedly narrowed in February but, with commodity prices rising strongly since then and some of the jump in imports set to be reversed, it will rebound in March. 5th April 2022 · 2 mins read
Canada Data Response Business Outlook & Consumer Expect. Surveys (Q1) The Bank of Canada’s latest quarterly surveys suggest that firms’ and consumers’ long-run inflation expectations remain well anchored, which the Bank could use to justify a slower tightening cycle... 4th April 2022 · 4 mins read
Canada Economics Weekly Budget 2022 could make Bank even more “forceful” The strong activity data released this week raise the odds of the Bank of Canada hiking interest rates by a larger 50bp at its meeting later this month, particularly if the government loosens fiscal... 1st April 2022 · 5 mins read
Canada Data Response GDP by Industry (Jan.) Following the moderate gain in GDP in January, the preliminary estimate of a further 0.8% m/m surge in activity in February will fuel speculation that the Bank of Canada will hike its policy rate by a... 31st March 2022 · 2 mins read
Canada Economics Update Budget 2022 could exacerbate inflationary pressures The government looks set to use its 2022 budget next week to outline a further increase in spending. While this will be modest in the context of the stimulus provided during the pandemic, it comes at... 29th March 2022 · 3 mins read
Canada Economics Weekly Higher forecasts for bond yields and the loonie Following the recent upgrades to our forecasts for GDP growth, inflation and interest rates, we now expect bond yields to be higher, and the loonie stronger, than we previously assumed. Meanwhile, we... 25th March 2022 · 5 mins read
Canada Chart Pack Market-implied policy tightening could topple housing The surge in interest rate expectations is a key risk to housing. We recently set out how, due to the much larger share of variable rate mortgages than before the pandemic, the Bank of Canada would... 23rd March 2022 · 9 mins read
Canada Economics Weekly Another record rise in house prices The second consecutive record monthly gain in house prices in February, as well as the further rise in consumer price inflation to almost 6%, means the Bank of Canada will be eager to continue hiking... 18th March 2022 · 3 mins read
