Canada Economics Update Consumers unlikely to spend their gasoline windfall The drop in gasoline prices in recent months is good news for households’ purchasing power, but we doubt they will spend all of their windfall. In fact, limited scope for further strong house price... 29th January 2019 · 1 min read
Canada Economics Update Business cycle indicators point to slowdown risks With a host of indicators suggesting that GDP growth will weaken, we think that the risks of a pronounced slowdown are larger than either the Bank of Canada or the consensus assumes. 18th January 2019 · 1 min read
Canada Economics Update Bank’s forecasts still too optimistic Despite slashing its economic growth forecast to below potential, the Bank of Canada reiterated today that it judges that more rate hikes will be needed to ensure that inflation remains in line with... 9th January 2019 · 1 min read
Canada Economics Update New home supply will weigh on house prices Given the huge amount of new supply set to reach the housing market this year, the recent deterioration in home sales is bad news for house prices. While house price weakness will be painful, the end... 8th January 2019 · 1 min read
Canada Economics Update Business Outlook Survey (Q4) The slump in the Business Outlook Survey future sales balance looks consistent with GDP growth falling towards zero and is another reason to doubt that the Bank of Canada will raise interest rates... 21st December 2018 · 1 min read
Canada Economics Update What ‘serious consequences’ could China mean? If the emerging diplomatic spat with China escalates further, there are a number of measures that China could use to inflict economic damage on Canada. But given that Canada’s trade exposures to China... 17th December 2018 · 1 min read
Canada Economics Update Bank of Canada sticks to its guns Despite the recent slump in oil prices, the Bank of Canada confirmed today that it intends to raise interest rates at least three more times. However, we think that a deterioration in the economy will... 5th December 2018 · 1 min read
Canada Economics Update GDP growth heading toward zero in first quarter The combined effect of Alberta’s forced oil production cuts and the slump in oil prices on activity in the sector are set to push Canadian GDP growth down to around 0.5% annualised in the first... 4th December 2018 · 1 min read
Canada Economics Update Revised saving rate highlights household risks The sharp downward revisions to the saving rate imply that households are even more vulnerable to higher interest rate than we had previously thought. In that environment, the Bank of Canada’s plan to... 3rd December 2018 · 1 min read
Canada Economics Update Vancouver housing heading for bumpy landing After the stabilisation of the Toronto housing market this year, it’s tempting to think that the deterioration in the Vancouver market will end in a soft landing. But Vancouver housing is more... 26th November 2018 · 1 min read
Canada Economics Update Fall update fiscal projections too upbeat In his fall budget update, Finance Minister Bill Morneau more than used up the revenue windfall from stronger GDP growth and higher oil prices this year to increase incentives for business investment... 22nd November 2018 · 1 min read
Canada Economics Update Oil price slump won’t cause repeat of 2015 Recent declines in oil prices will not by themselves cause a repeat of the 2015 economic slump. But they are a reason to doubt that the Bank of Canada will raise interest rates repeatedly. 14th November 2018 · 1 min read
Canada Economics Update Income growth past its peak While the recent data paint contrasting pictures about the pace of wages and salaries growth, there are fundamental reasons to think that it has slowed over the second half of 2018. 13th November 2018 · 1 min read
Canada Economics Update Consensus too optimistic on the loonie With investors already pricing in three more rate hikes from the Bank of Canada, it’s hard to see much support for the consensus view that the Canadian dollar will rise by 5% from here. We think that... 5th November 2018 · 1 min read
Canada Economics Update Bank’s hawkish message points to next hike in January By replacing its pledge to raise rates at a “gradual” pace with an indication that it intends to hike by at least as much as, if not more than, markets expect, the Bank of Canada today struck a... 24th October 2018 · 1 min read
Canada Economics Update Business Outlook Survey (Q3) The Bank of Canada’s latest Business Outlook Survey shows that growing capacity constraints are boosting investment intentions, which will reinforce expectations that the Bank will raise interest... 15th October 2018 · 1 min read
