Canada Economics Weekly Inflation surge to prompt more rapid tightening The surge in consumer price inflation in March leads us to think that the Bank of Canada will now rapidly raise its policy rate to 2.5% by the end of the year. 23rd April 2022 · 5 mins read
Canada Economics Weekly Households vulnerable to higher rates The Bank of Canada embraced a new-found hawkishness this week, hiking its policy rate by 50bp to 1.00% and announcing an almost immediate start to what amounts to a relatively more aggressive... 14th April 2022 · 5 mins read
Canada Economics Weekly Following 2022 budget, attention turns to the Bank The government used its 2022 Budget to set out a host of proposals to make housing more affordable for Canadians, but the impact of these measures on house prices will be far overshadowed by the... 8th April 2022 · 5 mins read
Canada Economics Weekly Budget 2022 could make Bank even more “forceful” The strong activity data released this week raise the odds of the Bank of Canada hiking interest rates by a larger 50bp at its meeting later this month, particularly if the government loosens fiscal... 1st April 2022 · 5 mins read
Canada Economics Weekly Higher forecasts for bond yields and the loonie Following the recent upgrades to our forecasts for GDP growth, inflation and interest rates, we now expect bond yields to be higher, and the loonie stronger, than we previously assumed. Meanwhile, we... 25th March 2022 · 5 mins read
Canada Economics Weekly Another record rise in house prices The second consecutive record monthly gain in house prices in February, as well as the further rise in consumer price inflation to almost 6%, means the Bank of Canada will be eager to continue hiking... 18th March 2022 · 3 mins read
Canada Economics Weekly Bank to be more aggressive amid booming jobs market The surprisingly strong rise in employment in February reduces the downside risks to near-term economic activity from higher energy prices and reinforces our view that the Bank of Canada will now hike... 11th March 2022 · 7 mins read
Canada Economics Weekly Following first rate hike, QT will be “next step” We expect the Bank of Canada to follow its interest rate hike this week with another one in April, when the Bank also seems likely to begin quantitative tightening. Drop-In (8 March, 10:00 EST/15:00... 4th March 2022 · 6 mins read
Canada Economics Weekly Terms of trade most favourable on record For Canada, the main impact of the Russia-Ukraine crisis so far has been to push up the terms of trade to the most favourable on record. That could lead to the Bank of Canada becoming more hawkish... 25th February 2022 · 5 mins read
Canada Economics Weekly Bank to begin quantitative tightening in March Communications from the Bank of Canada this week suggest that, as well as raising interest rates next month, the Bank will also begin quantitative tightening (QT). With inflationary pressures... 18th February 2022 · 4 mins read
Canada Economics Weekly Macklem betting on productivity rebound Bank of Canada Governor Tiff Macklem made the case this week that productivity growth should rebound strongly this year and next. While we agree that a rebound is on the cards, we judge that the Bank... 11th February 2022 · 6 mins read
Canada Economics Weekly Omicron disruption already in the rear-view mirror The data releases this week suggest that the Omicron wave was more disruptive than we anticipated, but there are already positive signs that the economy will strongly rebound this month. 4th February 2022 · 5 mins read
Canada Economics Weekly Bank signals eagerness to begin QT Although the Bank of Canada kept policy unchanged this week, its signal that it intends to start quantitative tightening soon was more hawkish than most were expecting. 28th January 2022 · 6 mins read
Canada Economics Weekly Will they, won’t they? Whether the Bank of Canada raises interest rates next week or not, the more important question now is how high will rates eventually rise? Our view is that current market pricing is too aggressive. 21st January 2022 · 4 mins read
Canada Economics Weekly Ivey PMI suggests widespread Omicron disruption The various reports this week of intense labour shortages and the slump in the Ivey PMI in December suggest that the Omicron variant is causing widespread economic disruption. 14th January 2022 · 6 mins read
Canada Economics Weekly Omicron a new type of challenge for labour market The Omicron wave will be characterised more by heightened absenteeism from work than previous waves. This raises the risk that the hit to activity will be larger than current restrictions alone might... 7th January 2022 · 4 mins read
