Canada Economics Update Government drops its fiscal anchor The 2023 Budget projects a much larger deficit than the prior Fall Economic Statement and, as a result, the government now agrees with our forecast that the debt-to-GDP ratio will rise. Roughly half... 28th March 2023 · 3 mins read
Global Economics Update What next after Credit Suisse? While the Credit Suisse rescue might draw a line under that particular institution’s problems, it is clear that confidence in the financial sector overall is still extremely fragile. So regardless of... 20th March 2023 · 5 mins read
Canada Economics Update Canada Housing Watch (Mar.) House prices fell at a slower pace in February and the sharp improvement in the sales-to-new listing ratio offers some hope that they will soon stabilise. While the turmoil in the global banking... 15th March 2023 · 4 mins read
Canada Economics Update Housing would be main casualty of SVB contagion The Canadian banking sector is heavily concentrated, reducing the risk that deposit runs at small lenders might trigger a broader crisis of confidence for the entire sector. As things stand, the... 14th March 2023 · 3 mins read
Canada Economics Update Policy unchanged, but Bank prepared to resume hikes The Bank of Canada kept its policy rate unchanged at 4.5% today as expected but, with one eye on the strength of the recent US data and the Fed’s hawkish reaction to that, it sounded less confident... 8th March 2023 · 3 mins read
Canada Economics Update Canada Housing Watch (Feb.) The unseasonably warm start to 2023 provided little support to the housing market or construction, with sales and prices falling further in January while housing starts slumped to a 28-month low. As... 15th February 2023 · 4 mins read
Canada Economics Update Making sense of the strength of employment The surge in employment in January highlights that some sectors are still recovering strongly and raises the prospect that the economy could avoid recession, although we still judge that a modest one... 14th February 2023 · 3 mins read
Canada Economics Update Services inflation already slowing Overall services price growth has already slowed but, for the Bank of Canada to loosen policy, we will need to see far more convincing signs of lower inflation in the most labour-intensive service... 9th February 2023 · 2 mins read
Canada Economics Update Bank hints that smaller 25 bp hike likely to be the last The Bank of Canada accompanied its smaller 25 bp hike with new guidance that it intends to hold the policy rate at the current 4.5% while it assesses the impact of the cumulative interest rate... 25th January 2023 · 3 mins read
Canada Economics Update Canada Housing Watch (Jan.) The large fall in new listings in December failed to prevent another sizeable drop in house prices, but the improvement in the sales-to-new listing ratio offers some hope that the downward pressure on... 17th January 2023 · 4 mins read
Canada Economics Update Employment strength masks worrying signs elsewhere The activity and labour market data imply the economy carried more momentum into 2023 than we expected, but the weakness of temporary employment suggests cracks are showing beneath the surface. 10th January 2023 · 2 mins read
Canada Economics Update Shelter inflation set to fall sharply this year Strong rental growth and higher mortgage costs will keep shelter inflation elevated for the next few months, but we expect it to fall sharply over the rest of 2023 as lower house prices feed through.... 5th January 2023 · 3 mins read
Canada Economics Update Canada Housing Watch (Dec.) New listings fell in November but, because they are taking longer to sell, the inventory of homes for sale continued to rise. That is one reason to expect house prices to fall further, particularly if... 15th December 2022 · 4 mins read
Canada Economics Update What could go wrong in 2023? As several forecasters now seem to share our view that the economy will suffer a moderate recession next year, in this Update we discuss the risks that could result in a much deeper downturn. 14th December 2022 · 3 mins read
FX Markets Update We expect the loonie to weaken further against the US dollar The Canadian dollar has underperformed most other currencies over recent weeks, and we expect it to depreciate further against the US dollar over the first half of next year. In view of the wider... 9th December 2022 · 3 mins read
Canada Economics Update The end of the tightening cycle? The Bank of Canada delivered a somewhat dovish 50bp rate hike today, by softening its explicit forward guidance that interest rates will need to rise further. Our GDP and inflation forecasts suggest... 7th December 2022 · 3 mins read
