Mixed signals to keep Bank on hold The Bank of Canada is likely to upgrade its GDP growth forecasts in its new Monetary Policy Report, but we think that its expectations will prove too optimistic. While Governor Stephen Poloz may... 3rd July 2019 · 6 mins read
International Merchandise Trade (May) Canadian exporters are doing well given the evidence of a marked deterioration in the global backdrop but, with the domestic and global manufacturing surveys deteriorating further in June, it is hard... 3rd July 2019 · 2 mins read
Canada Economics Update Business Outlook Survey (Q2) The latest Business Outlook Survey somewhat surprisingly shows that Canadian firms have convinced themselves a recovery is just around the corner, even though the weak global backdrop and evidence of... 28th June 2019 · 2 mins read
Canada Economics Weekly New home sales rebound The recent rebound in new home sales in Toronto is an encouraging sign that the local housing market is not about to emulate the sharp falls in prices in Vancouver. 4,794 new homes were sold in... 28th June 2019 · 5 mins read
Canada Data Response GDP by Industry (Apr.) The solid 0.3% m/m gain in monthly GDP in April supports our view that second-quarter GDP growth was between 2.5% and 3.0% annualised. But that strength was mainly due to a recovery from a series of... 28th June 2019 · 2 mins read
Canada Chart Pack Core inflation unlikely to rise further We expect an average of the Bank’s core inflation measures to remain close to 2% this year, before declining in 2020, as GDP growth falls below potential. An average of the Bank of Canada’s three core... 25th June 2019 · 9 mins read
Canada Data Response Consumer Prices (May) The upside surprises in core and headline inflation in May reduce the chance of the Bank cutting interest rates in the next few months. But we expect core inflation to drift back down in the second... 19th June 2019 · 1 min read
Canada Economics Update Home equity loans to have limited impact The full details of the new first-time buyer (FTB) equity loan scheme do not change our view that it will have little effect on the housing market. While the recent drop in mortgage rates will help to... 18th June 2019 · 1 min read
Canada Data Response Manufacturing Sales (Apr.) Temporary plant shutdowns in the automotive sector explain why manufacturing sales fell in April, but the further drop in the Markit manufacturing PMI in May suggests that underlying demand remains... 18th June 2019 · 1 min read
Canada Economics Update Core inflation to decline in 2020 Wage growth looks set to rise modestly, but the effect on unit labour costs is likely to be offset by a rebound in productivity growth. This suggests that core inflation will remain close to 2.0% in... 17th June 2019 · 1 min read
Canada Economics Weekly Exporters left Kawhi-ing in face of global weakness Any boost to spending from the Raptors’ NBA finals victory won’t make up for weakness elsewhere, with Export Development Canada reporting this week that its semi-annual Trade Confidence Index has... 14th June 2019 · 1 min read
DM Markets Chart Pack Unlike bond yields, we expect equities to fall further Investors are now even more dovish that we have long been about the outlook for monetary policy in the US. As such, we doubt that Treasury yields will drop further. However, we don’t expect looser... 14th June 2019 · 1 min read
Canada Economics Update Wage growth not as strong as LFS suggests Annual wage growth according to the Labour Force Survey looks set to rise towards almost 4% in the coming months, but experience suggests that it is probably exaggerating the true strength of wages... 13th June 2019 · 1 min read
Canada Economics Focus How will the Bank respond to the next downturn? The risk of a recession is arguably higher in Canada than elsewhere and the low level of interest rates limits the ability of the Bank of Canada to respond. Even if the Bank utilises unconventional... 10th June 2019 · 1 min read
Canada Economics Weekly Trade tensions to weigh on growth April’s trade data painted a positive picture of the manufacturing sector, but the further fall in the manufacturing PMI in May suggests that the outlook for exporters is bleak. Conditions could... 7th June 2019 · 1 min read
Canada Data Response Labour Force Survey (May) Another strong month for employment and a further rise in wage growth seems to support the Bank of Canada’s view that the recent economic slowdown was mainly due to temporary factors. But with both... 7th June 2019 · 1 min read
