Bank becoming more dovish

While the Bank of Canada kept policy unchanged today, it cut its growth forecasts and delivered a more dovish policy statement. This supports our view that the Bank will cut its policy rate before...

30th October 2019 · 3 mins read

Surveys point to weak growth

The Business Outlook Survey painted a mixed picture ahead of the Bank of Canada’s October monetary policy decision. The Future Sales Indicator (FSI) – which includes firms’ expectations for future...

29th October 2019 · 8 mins read

Election won’t sway Bank’s decision

After losing its majority this week, the Liberal government will have to grant concessions to other parties to pass legalisation. The election result is unlikely to sway next week’s Bank of Canada...

25th October 2019 · 5 mins read

Bank on hold, for now

There is little reason to expect the Bank to alter its policy rate next week but, with the surveys continuing to point to below-potential GDP growth and weaker inflation ahead, we expect the Bank to...

24th October 2019 · 7 mins read

Canada Data Response

Teranet House Prices (Sep.)

House price inflation edged up to a four-month high of 0.7% y/y in September, from 0.6%, and the strength of the recent rebound in sales points to a further rally, which should extend into the first...

18th October 2019 · 2 mins read

Minority government looking likely

Over the past week the Conservatives have overtaken the Liberals in the polls for next Monday’s federal election. Whichever party wins, we doubt the election will materially affect the economic...

18th October 2019 · 5 mins read

Public finances in better shape than in most countries

The Conservatives are sticking to their commitment to balance the budget if elected, but over the next 18 months the party’s deficit proposals look very similar to the Liberal’s. While the high...

17th October 2019 · 3 mins read

Manufacturing Sales (Aug.)

The rise in sales volumes suggests that, following July’s 0.1% fall, manufacturing GDP rose by 0.5% m/m in August. But as the General Motors strike in the US weighed on auto production in Canada in...

17th October 2019 · 2 mins read

Consumer Prices (Sep.)

Headline inflation was unchanged at 1.9% in September but, as some of the temporary factors that have been boosting inflation fade, we expect it to fall over the next six months. While core inflation...

16th October 2019 · 2 mins read

Poloz’s favourite indicator weakens further

Bank of Canada Governor Stephen Poloz once described net business creation as “one of my favourite variables”. That data, released this week, were hardly encouraging. Annual growth in business...

11th October 2019 · 6 mins read

Labour Force Survey (Sep.)

The second month of strong employment gains in September suggests that the labour market is continuing to shrug off global growth concerns. But with the gains driven by public sector and self-employed...

11th October 2019 · 2 mins read

What does the election mean for the housing market?

Both the Liberals and the Conservatives have proposed policies that could boost house prices. The effects would be small but, after a decade of tightening lending restrictions, it is hardly an...

9th October 2019 · 4 mins read

Bank of Canada to wait a little longer to cut rates

The weak tone of the international business surveys in September shows that large parts of the global economy continue to struggle. We think this weakness will prompt the Bank of Canada to cut...

4th October 2019 · 5 mins read

International Merchandise Trade (Aug.)

The trade deficit unexpectedly narrowed in August thanks to a strong rise in export prices but, with export volumes falling and import volumes rising, it appears net trade was a drag on third-quarter...

4th October 2019 · 2 mins read

Policy stimulus to limit economic slowdown

After a strong second quarter, a sharp deceleration in export growth is set to pull GDP growth down from 1.5% this year to an even further below-potential 1.3% in 2020. We expect signs of slower...

3rd October 2019 · 19 mins read