Canada Economics Weekly Bank to begin quantitative tightening in March Communications from the Bank of Canada this week suggest that, as well as raising interest rates next month, the Bank will also begin quantitative tightening (QT). With inflationary pressures... 18th February 2022 · 4 mins read
Canada Data Response Retail Sales (Dec.) Retail sales fell in December as the Omicron wave took hold but, rather oddly, the preliminary estimate suggests that decline was more than revered in January, even as coronavirus restrictions were... 18th February 2022 · 2 mins read
Canada Economics Update Weak investment highlights long-run challenges Business investment has been much weaker in Canada than the US since the pandemic, which helps to explain why productivity growth has lagged. There are reasons to be optimistic about the next couple... 16th February 2022 · 4 mins read
Canada Data Response Consumer Prices (Jan.) Consumer price inflation rose by more than expected at the start of 2022 and the breakdown suggests that inflationary pressures are broadening, which adds to the pressure for the Bank of Canada to... 16th February 2022 · 2 mins read
Canada Economics Weekly Macklem betting on productivity rebound Bank of Canada Governor Tiff Macklem made the case this week that productivity growth should rebound strongly this year and next. While we agree that a rebound is on the cards, we judge that the Bank... 11th February 2022 · 6 mins read
Canada Economics Update What if oil prices remain higher than we expect? Higher oil prices would not provide as large a boost to the Canadian economy as in the past but, at a time when GDP is already set to rise above potential and inflation is well above target, they... 9th February 2022 · 3 mins read
Canada Data Response International Trade (Dec) Goods trade moved into a modest deficit in December but, with oil prices rising sharply since then, it should return to surplus in January. 8th February 2022 · 2 mins read
Canada Economics Weekly Omicron disruption already in the rear-view mirror The data releases this week suggest that the Omicron wave was more disruptive than we anticipated, but there are already positive signs that the economy will strongly rebound this month. 4th February 2022 · 5 mins read
Canada Data Response Labour Force Survey (Jan.) The Omicron outbreak took a larger toll on the labour market than anticipated in January but, as many of the coronavirus restrictions have already been lifted, employment will bounce back this month. 4th February 2022 · 2 mins read
Canada Economics Update Bank of Canada could sell assets sooner than most One challenge for central banks as they consider reducing the size of their balances sheets is that, if they sell assets bought during the pandemic, they will likely face a financial loss. This is... 3rd February 2022 · 5 mins read
Canada Data Response GDP by Industry (Nov.) The stronger-than-expected rise in November means that GDP climbed back above its pre-pandemic level, but activity appears to have stagnated in December and November’s gain was likely reversed in... 1st February 2022 · 2 mins read
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 Update Bank stands pat but rate hike coming in March The Bank of Canada kept policy unchanged today but judges that the conditions to start raising interest rates have now been met, suggesting that it will hike its policy rate at the next meeting in... 26th January 2022 · 3 mins read
Canada Chart Pack Wage growth could prompt faster policy tightening The Bank of Canada’s fourth-quarter Business Outlook Survey showed firms’ wage expectations at a record high, which suggests that wage growth could accelerate to far above the pre-pandemic norm this... 25th January 2022 · 9 mins read
Canada Economic Outlook Higher interest rates will leave economy vulnerable Despite a weak start to the year, we expect GDP to rise by 3.6% in 2022 due to broad-based gains in consumption, business investment and net trade. Against that backdrop, the Bank of Canada is set to... 24th January 2022 · 19 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
