Labour Force Survey (Feb.) & International Trade (Jan.)

The 30,000 rise in employment in February is encouraging, but the real test will come in the next few months as the effects of the coronavirus outbreak are felt. Despite the strong labour market, the...

6th March 2020 · 2 mins read

Bank to cut interest rates again in April

The growing risk of COVID-19 to the outlook suggests that the Bank of Canada will follow today’s 50 bp cut in interest rates with an additional 25 bp cut in April. Given the Governing Council’s...

4th March 2020 · 3 mins read

GDP (Dec. & Q4)

GDP growth of 0.3% annualised in the fourth quarter was in line with the Bank of Canada’s forecast, but the 0.3% m/m gain in December provides a stronger hand-over to the first quarter than the Bank...

28th February 2020 · 2 mins read

Dovish policy statement coming

The potential for the coronavirus to develop into a pandemic is clearly the biggest risk to our view that the Bank of Canada will keep policy on hold this year. We expect the Bank to remain on the...

26th February 2020 · 7 mins read

Virus fears pull down interest rate expectations

While the further spread of the Covid-19 virus increases the chance of interest rate cuts, the Bank of Canada seems likely to approach the issue in the same way that it approached the US-China trade...

25th February 2020 · 9 mins read

First-quarter rebound to disappoint

The data released this week and the negative effects of the rail blockades on the economy in February suggest that first-quarter GDP growth will rebound by less than we previously thought.

21st February 2020 · 5 mins read

Teranet House Prices (Jan.)

House prices rose by less than we expected in January but, with the sales-to-new listing ratio elevated and the mortgage stress tests set to become less stringent, the pace of gains will accelerate...

20th February 2020 · 2 mins read

Rail blockades to weigh on first-quarter growth

Due to the ongoing protests that have crippled the rail network, we are reducing our forecast for first-quarter GDP growth to 1.5% annualised, from 1.8%. But providing the blockades end soon, growth...

20th February 2020 · 3 mins read

Consumer Prices (Jan.)

Following the rise to 2.4% in January, a sharp decline in energy inflation will pull headline inflation back down to around 1.5% by April. Core inflation is also likely to decline, but not by as much.

19th February 2020 · 2 mins read

Reduced stress tests another reason for Bank to hold

The proposed change to the mortgage stress tests could put even more upward pressure on house prices over the next 12 months, by increasing the amount that buyers can borrow by more than 3%. With the...

19th February 2020 · 3 mins read

Manufacturing Sales (Dec.)

The low level of the manufacturing PMI in January and the renewed disruption to the rail network this month suggest the manufacturing sector will continue to struggle following December’s fall in...

18th February 2020 · 2 mins read

Construction prospects bright

After a few months of weakness, the data this week showed increases in residential building permits and housing starts around the turn of the year. As new home sales in Toronto have now fully...

14th February 2020 · 7 mins read

Wage growth to slow following January’s spike

Severe weather contributed to January’s jump in the average hourly wage by limiting the hours that salaried employees were able to work. As their hours return to normal, annual wage growth is likely...

11th February 2020 · 2 mins read

Volatile times for exporters

December’s trade data reinforced our view that GDP rebounded strongly at the end of the year, but the latest business surveys confirm that the outlook for exporters remains challenging.

7th February 2020 · 4 mins read

Labour Force Survey (Jan.)

The further rise in employment, the decline in the unemployment rate, and the sharp rebound in wage growth in January all reinforce our view that the Bank of Canada is unlikely to cut interest rates...

7th February 2020 · 2 mins read