GDP (June & Q2 2019) Temporary factors helped to support the better-than-expected 3.7% annualised gain in GDP in the second quarter and we expect growth to slow to just 1.5% in the third quarter. Given the downside risks... 30th August 2019 · 2 mins read
Bank to set the stage for October rate cut We expect the Bank of Canada to present a more dovish policy statement next week, setting the stage for an interest rate cut in October. 28th August 2019 · 7 mins read
October rate cut looking more likely Following the escalation of the US-China trade war and further signs of weakness in much of the global economic data, investors have increased their bets on looser monetary policy in Canada. Market... 27th August 2019 · 9 mins read
Mixed signals for the Bank Developments this week suggest that prospects for global GDP growth are worse than the Bank of Canada expected. But with the domestic data continuing to look positive, we suspect that it will be... 23rd August 2019 · 5 mins read
Retail Sales (Jun.) June’s 0.4% m/m rise helped support the first quarterly expansion in retail sales volumes since the middle of last year. While growth was still subdued, the recent rise in consumer confidence and... 23rd August 2019 · 3 mins read
Elevated inventories a key risk to the outlook If manufacturers and wholesalers draw down their inventories to more normal levels over the next 18 months, it will knock over 1.0%-point from annual GDP growth by the early stages of 2020. 22nd August 2019 · 2 mins read
Consumer Prices (Jul.) As headline inflation and the Bank of Canada’s three core measures remained close to target in July, there seems to be little chance of the Bank springing a surprise by cutting interest rates in two... 21st August 2019 · 2 mins read
Manufacturing Sales (Jun.) Manufacturing sales volumes declined by 0.2% m/m in June and the sharp drop in inventories implies that manufacturing GDP fell by 1.0%. The business surveys suggest that the sector will continue to... 20th August 2019 · 2 mins read
Stronger sales point to renewed house price gains In contrast to the gloomy picture painted by the now even more inverted yield curve, the latest housing indicators suggest fundamentals continue to improve. 16th August 2019 · 7 mins read
Core inflation more likely to decline than rise Despite the recent pick-up in wage growth, we continue to think that core inflation will decline over the next 12 months. 15th August 2019 · 4 mins read
Markets see greater chance of interest rate cuts The fall-out from the escalation of the US-China trade war, as well as signs of even weaker GDP growth in Europe, moved market expectations for the Bank of Canada’s policy rate closer to our own... 9th August 2019 · 4 mins read
Labour Force Survey (Jul.) The second consecutive monthly drop in employment will raise a few eyebrows among policymakers, but it’s the surge in hourly wage growth to 4.5% that will capture the most attention. Stronger wage... 9th August 2019 · 2 mins read
Bank of Canada faces mounting downside risks The escalation of the US-China trade war suggests the Bank of Canada will once again have to mark down its forecasts for GDP growth. Given that policymakers already think it will take several years... 7th August 2019 · 3 mins read
Brighter past, gloomier future May’s GDP data suggest that the economy was in better shape than the Bank of Canada thought in the first half of the year. But a further deterioration in the global business surveys, coupled with an... 2nd August 2019 · 5 mins read
International Merchandise Trade (Jun.) June’s trade data suggest that net exports made a strong contribution to the likely 3.0% annualised increase in GDP in the second quarter. But signs of weaker growth elsewhere, combined with the... 2nd August 2019 · 2 mins read
Strength of manufacturing won’t be sustained The manufacturing sector drove half of May’s rise in GDP, but the latest business surveys suggest that this strength will not be sustained. 1st August 2019 · 2 mins read
