Canada Economics Weekly Inverting to a hurting? Yield curve inversions have a patchy record of predicting recessions in Canada, but they almost always precede a sharp economic slowdown and the unusually deep nature of the current inversion makes it... 12th August 2022 · 7 mins read
Canada Economics Weekly Stagflation summer The further falls in home sales and employment in July add to the evidence that the economy is losing momentum. With no sign of a material easing of inflationary pressures, however, it is too soon to... 5th August 2022 · 3 mins read
Canada Economics Weekly Business surveys point to slower GDP growth The slump in the CFIB Business Barometer in July – to a post-pandemic low – shows that the jump in borrowing costs is hitting more than just the housing market. With the survey still pointing to... 29th July 2022 · 5 mins read
Canada Economics Weekly Inflation finally peaks CPI inflation has finally peaked but this will not be enough to prevent further large interest rate hikes from the Bank of Canada, especially as there is little evidence yet that the weakening housing... 22nd July 2022 · 4 mins read
Canada Economics Weekly Bank’s shock tactics carry significant risks The Bank of Canada justified its 100 bp interest rate hike on the basis that front-loading hikes has historically raised the chance of a “soft landing”. With the pace of house price declines already... 15th July 2022 · 5 mins read
Canada Economics Weekly Inflation expectations too high for the Bank The falls in commodity prices this week point to some relief ahead for CPI inflation, but the Bank of Canada will be more focused on the rises in long-run inflation expectations and wage growth in the... 8th July 2022 · 4 mins read
Canada Economics Weekly Economy losing momentum While the apparent contraction in GDP in May appears to have been partly due to temporary factors, it also reflects the impact of the surge in interest rates on housing. With the business surveys for... 30th June 2022 · 5 mins read
Canada Economics Weekly Further rise in inflation cements 75 bp hike The May CPI data showed that inflationary pressures remain acute across the economy, which reinforces our view that despite growing concerns about the housing market, the Bank of Canada will become a... 24th June 2022 · 4 mins read
Canada Economics Weekly New CPI weights to push inflation above 8% The new CPI weights outlined this week mean that inflation will peak at more than 8% in June, which is higher than we previously expected. That further raises the chance of the Bank of Canada... 17th June 2022 · 6 mins read
Canada Economics Weekly From one policy mistake to another? Governor Tiff Macklem’s hawkish comments this week, even as he presented a report warning of the risks of aggressive policy tightening, leave little doubt that the Bank of Canada is singularly focused... 10th June 2022 · 5 mins read
Canada Economics Weekly 50, 75…100 bp? Following its second 50 bp policy rate hike, the Bank of Canada hinted that it will consider an even larger move next month. With CPI inflation heading to 7.5% this month due to the renewed surge in... 3rd June 2022 · 6 mins read
Canada Economics Weekly Bank to continue with 50bp rate hikes With core inflation rising well above the ceiling of the 1% to 3% target range and first-quarter GDP growth likely to have been as strong as 5.0% annualised, there is little to stop the Bank of Canada... 27th May 2022 · 4 mins read
Canada Economics Weekly Core inflation still rising, as housing slumps The Bank of Canada will have eyed this week’s data releases and market moves with some trepidation. The further acceleration in core CPI inflation in April means the Bank is all but guaranteed to push... 20th May 2022 · 5 mins read
Canada Economics Weekly Gasoline price jump to drive CPI inflation above 7% The unexpected further jump in gasoline prices, reflecting a sharp widening of refiners’ margins, means we now expect headline CPI inflation to rise above 7% in May. While the rise in refiners’... 13th May 2022 · 6 mins read
Canada Economics Weekly Cracks in housing market risk turning into chasms The slump in home sales in April, combined with the unexpected fall in hours worked, point to downside risks to GDP last month. While hours worked are set to rebound in May, there is likely to be much... 6th May 2022 · 4 mins read
Canada Economics Weekly Business surveys strong, but clouds gather for housing The CFIB Business Barometer remained very strong in April and seems to bode well for the short-term outlook, but signs of a sharp slowdown in the housing market suggest that higher interest rates may... 29th April 2022 · 5 mins read
