Bank willing to accept below-target inflation

The Bank of Canada has implied that it would be willing to accept below-target inflation during periods when financial vulnerabilities are elevated. Accelerating house price inflation means financial...

4th February 2020 · 3 mins read

Further signs Bank unlikely to cut

A speech this week from Deputy Governor Paul Beaudry as well as some encouraging data for the fourth quarter reinforce our view that the Bank of Canada is unlikely to cut interest rates this year.

31st January 2020 · 6 mins read

GDP by Industry (Nov.)

The 0.1% m/m rise in GDP in November was better than expected and reinforces our view that the Bank of Canada’s latest forecasts are too weak. We think that an even stronger monthly gain in GDP in...

31st January 2020 · 2 mins read

Coronavirus unlikely to tip the scales for a rate cut

After the SARS outbreak, the Bank of Canada shifted from raising to cutting rates in just three months. Other factors were also at play, however, and the Wuhan virus is less likely to tip the scales...

29th January 2020 · 3 mins read

Retail Sales (Nov.)

The 0.9% m/m rise in retail sales will come as a relief to the Bank of Canada and supports our view that it will leave interest rates unchanged this year.

24th January 2020 · 2 mins read

Bank of Canada unlikely to cut interest rates

We are not convinced the Bank of Canada made a sharp dovish turn today as many suggest. As the data are likely to surprise the Bank to the upside before its next meeting, we continue to see it on hold...

22nd January 2020 · 3 mins read

Consumer Prices (Dec.)

Headline inflation and an average of the three core measures were unchanged at slightly above 2% at the end of 2019, but we expect both to decline toward 1.5% by the second half of 2020.

22nd January 2020 · 2 mins read

Manufacturing Sales (Nov.)

November’s fall in manufacturing sales was mainly due to the disruption caused by the CN Rail strike. As that was resolved before the end of November, the sector is likely to have ended 2019 on a...

21st January 2020 · 2 mins read

Teranet House Prices (Dec.)

House price inflation gained further momentum at the end of 2019, reaching an 11-month high of 2%. Given constrained supply, we expect house price inflation to accelerate to 7.5% in the next six...

20th January 2020 · 2 mins read

The Candyman cometh

Recent accusations from some that Governor Stephen ‘Candyman’ Poloz is the prime reason for households’ debt binge in the past decade are unlikely to sway the Bank of Canada’s decision next week. With...

17th January 2020 · 7 mins read

Temporary nature of slowdown to keep Bank on hold

Next week the Bank of Canada is likely to once again trim its forecast for GDP growth. But as temporary factors are partly to blame and there have been several positive external developments in recent...

15th January 2020 · 6 mins read

Business Outlook Survey (Q4)

The sharp rise in the Future Sales Indicator of the Business Outlook Survey (BOS) is surely the final nail in the coffin for the idea that the Bank of Canada might soon cut interest rates. The survey...

13th January 2020 · 2 mins read

Poloz cautiously upbeat amid mixed data

Despite the further deterioration in the latest activity data, in his latest ‘fireside chat’ on Thursday Bank of Canada Governor Stephen Poloz seemed cautiously upbeat about the current state of the...

10th January 2020 · 4 mins read

Labour Force Survey (Dec.)

December’s partial rebound in employment shows that the bottom isn’t dropping out of the labour market, but the slump in wage growth underscores our forecast that core inflation is likely to decline...

10th January 2020 · 2 mins read

GDP growth to rebound in the first quarter

The further deterioration in the latest data have caused some to double down on their forecasts that the Bank of Canada will cut interest rates this year. But the weakness in November was mainly due...

8th January 2020 · 3 mins read