Canada: BoC's Macklem - Getting closer to easing

May 1, 2024 8:41 PM UTC

Canada February GDP - Q1 looking less positive than previously projected

April 30, 2024 1:20 PM UTC

February Canadian GDP saw a second straight rise, but at 0.2% was below the 0.4% projected with January’s data and January was revised down to a 0.5% increase from 0.6%. The advance estimate for March is unchanged, which would leave a 0.6% rise (2.5% annualized) in Q1.

Bank of Canada Minutes Look to Gradual Easing, Divided on When to Start

April 24, 2024 6:44 PM UTC

Bank of Canada minutes from the April 10 meeting confirm a greater confidence on inflation falling, though there is disagreement within the Governing Council over when policy easing will become appropriate. There was agreement that easing would probably be gradual given the risks to the outlook and

Bank of Canada Sees Progress in Reducing Inflation, June Easing Possible

April 10, 2024 3:37 PM UTC

The Bank of Canada made no policy changes with rates left at 5.0% and Quantitative Tightening continuing as expected. However the tone of the statement is significantly more optimistic on inflation, focusing more on this than recent signs of stronger activity. The BoC still needs to see progress on

Bank of Canada to Leave Rates Unchanged on April 10, Noting Stronger GDP and Slower CPI

April 2, 2024 5:45 PM UTC

The Bank of Canada meets on April 10 and no change in rates from the current 5.0% is likely. The BoC is likely to revise near term forecasts for GDP higher and CPI lower, and leave its options open for easing at future meetings, dependent on incoming data, without giving any clear signals on timing.

Canada - BoC Q1 Business Outlook Survey shows some easing in inflation expectations

April 1, 2024 2:53 PM UTC

The Bank of Canada’s Q1 business outlook survey shows some easing of inflation expectations while being mostly subdued on the economic picture. The BoC looks unlikely to ease on April 10 with Q1 GDP looking set to exceed expectations, but this survey helps to maintain hope that by June enough prog

Canada January GDP - Q1 looking much stronger than BoC had expected

March 28, 2024 1:31 PM UTC

Not only did January Canadian GDP with a 0.6% rise exceed the preliminary 0.4% estimate, in data assisted by the end of a strike, the advance estimate for February is strong too with a rise of 0.4%. If that proves correct even an unchanged March would leave Q1 up by 3.5% annualized, well above the B

Canada: BoC's Rogers - Weak Canadian productivity an emergency

March 26, 2024 12:19 PM UTC

Today's comments from Senior BoC Deputy Governor Rogers help explain why Canada and the US have similar inflation pictures while the US economy is sharply outperforming.

Canada: BoC's Gravelle - Sees QT continuing into 2025

March 21, 2024 1:55 PM UTC

Today's comments from BoC Deputy Governor Gravelle on QT, like yesterday's minutes, show little sign of the BoC moving in a dovish direction.

Canada February CPI slows, BoC's Gravelle to speak on QT on Thursday

March 19, 2024 1:23 PM UTC

February’s Canadian CPI has seen an unexpected fall to 2.8% yr/yr from 2.9% in January and 3.4% in December, putting the series at its lowest since March 2021. While the Bank of Canada cannot claim victory yet, the data will provide encouragement that inflationary pressures are now fading.  A spe

Bank of Canada Keeps Markets Waiting

March 6, 2024 6:49 PM UTC

The Bank of Canada left both rates (at 5.0%) and its forward guidance unchanged in its latest statement. A rate cut at the next meeting in April now looks unlikely, and while we continue to project a move in June it is now a close call between June and July for when the BoC starts to cut rates. 

Bank of Canada to Leave Rates Unchanged on March 6, With a Cautious Statement

February 29, 2024 6:41 PM UTC

The Bank of Canada meets on March 6 and while any fine tuning to the statement is more likely to be dovish than hawkish, we doubt that views have changed much at the BoC since its last meeting on January 24. We expect rates to be left unchanged at 5.0% with few hints that easing is close to be given

Bank of Canada Minutes Detail Inflationary Concerns

February 7, 2024 7:39 PM UTC

The Bank of Canada’s minutes from January 24 show significant concern about the persistence of inflation, despite seeing the economy as having moved into excess supply due to slowing demand. This leaves the BoC unsure about when to cut rates, though further increases now look unlikely.

Canada: BoC's Macklem - Shelter biggest contributor to above target inflation

February 6, 2024 6:12 PM UTC

Canada November GDP - Q4 looking stronger than BoC projected

January 31, 2024 2:06 PM UTC

November Canadian GDP with a rise of 0.2% saw momentum pick up after there straight flat outcomes which flowed two straight negatives. The preliminary estimate for December is stronger still at 0.3%, which suggests Q4 will come in stronger than a flat forecast from the BoC. 

Preview: Due January 31 - Canada November GDP - Q4 may exceed BoC forecast

January 30, 2024 1:26 PM UTC

We expect Canadian GDP to increase by 0.2% in November, which would be slightly stronger than a preliminary 0.1% estimate made with October’s report and the strongest month since May. We expect December’s preliminary estimate will be marginally positive too, suggesting Q4 GDP will beat not only

Bank of Canada Drops Tightening Bias

January 24, 2024 5:15 PM UTC

The Bank of Canada left rates at 5.0% as expected though the statement took a clearly more dovish tone, dropping a tightening bias though still expressing concern over persistently high inflation. Easing does not appear imminent but we now expect it to start in Q2 rather than Q3.

Bank of Canada Unlikely to Hint at Easing on January 24

January 16, 2024 7:25 PM UTC

The Bank of Canada meets on January 24 and rates look highly likely to remain unchanged at 5.0%. The statement is likely to see a similar tone to that on December 6 which no longer saw the economy as in excess demand but remained willing to raise the policy rate further if needed. 

Canada November CPI - Worrying underlying resilience

December 19, 2023 2:34 PM UTC

The BoC’s core rates show CPI-median unchanged at 3.4% yr/yr and CPI-trim unchanged at 3.5%, both above consensus though CPI-common did slip to 3.9% from 4.2%. The average of the three at 3.6% is the lowest since December 2021 but still well above the BoC’s 2.0% target.
On the month CPI rose by 0

Canada: BoC's Macklem - 2% inflation in sight, too early to cut rates

December 15, 2023 5:44 PM UTC

Bank of Canada Tightening Bias Persists but is Reduced

December 6, 2023 3:44 PM UTC

The BoC states that economic growth stalled in the middle quarters of 2023, which gives roughly equal weight to a negative Q3 and an upwardly revised positive in Q2, appropriately with momentum stabilizing in late Q3 to suggest a broadly flat picture. However the BoC concludes that the economy is no

Bank of Canada to Leave Rates Unchanged With Mild Tightening Bias

December 1, 2023 2:46 PM UTC

The October 25 statement saw clearer signs that monetary policy is moderating spending and relieving price pressures, and with Q3 GDP showing an unexpected decline of 1.1% annualized, well below an October BoC forecast for a 0.8% increase, that assessment is likely to persist. However the Q3 decline

Bank of Canada Agreed to Hold on October 25, but Split on Future

November 8, 2023 7:12 PM UTC

The views outlined above may look similar to what we will hear from FOMC minutes from their November 1 meeting on November 21, despite the fact that momentum in the Canadian economy has stalled to near zero while US GDP saw a strong advance in Q3. There may even be more at the BoC expecting further

Bank of Canada Forecast Fine Tuned, Easing Later but Faster in 2024

October 25, 2023 5:06 PM UTC

The BoC’s updated view
The BoC stated that there is growing evidence that past interest rate increases are dampening economic activity and relieving price pressures. There can be little doubt over the first conclusion given recent GDP data, but that the BoC felt able to make the second conclusion i

Bank of Canada to Hold Rates on October 25, Won’t Signal Rates Have Peaked

October 17, 2023 4:34 PM UTC

A quarterly Monetary Policy Report is due at the meeting. This will confirm that Q3 GDP at -0.2% annualized significantly underperformed a 1.5% forecast made with July’s MPR, and that Q3 CPI, averaging 3.7% yr/yr, significantly exceeded July’s 3.3% projection. Q3 GDP appears to be tracking below

Canada September Employment: Unimpressive Detail but BoC Tightening Risks Increase

October 6, 2023 1:30 PM UTC

Most of the rise in employment came from a 47.9k increase in part time work, with full time up a moderate 15.8k. The public sector with a rise of 36.6k also explained over half of the increase. With self-employment up by 26.1k private sector employment increased by a minimal 1.1k. Educational servic

Bank of Canada Pauses as GDP Slips but Remains Worried About Inflation

September 6, 2023 2:47 PM UTC

The BoC stated that given signs of easing excess demand and given policy lags they decided to hold the rate at 5.0% but they go on to say that they are concerned about persistent underling inflationary pressures and are prepared to tighten further if needed. While we expect the BoC to keep rates at

Subdued Underlying Canadian GDP Picture Justifies a BoC Rates Pause

September 1, 2023 1:33 PM UTC

Household consumption slowed to a 0.2% pace from 4.7% in Q1 as retail sales data had already implied. The consumer picture has been generally subdued apart from a very strong January inflated by mild weather. Gross fixed capital formation rise by 1.6% after a 5.3% Q1 decline, and given that housing

Bank of Canada to Hold Rates on September 6, Awaiting Further Data

August 29, 2023 5:40 PM UTC

The Bank of Canada meets on September 6 and looks likely to leave rates at 5.0%, after tightening by 25bps in its preceding two meetings, assuming Q2 GDP data due on September 1 shows the expected signs of slowing. The statement however is likely to make it clear that further tightening is possible

July 12, 2023 4:22 PM UTC

The statement welcomed a slower May CPI outcome but saw downward momentum in inflation as largely from energy. It added that with three-month core rates rising around 3.5-4.5% since September underlying price pressures appear more persistent than anticipated. The BoC now sees inflation running aroun

July 3, 2023 3:12 PM UTC

After tightening by 425bps to 4.50% in the 12 months to January 2023, the BoC paused at its March and April meetings, before resuming tightening with a 25bps move in June. The statement released in June noted stronger than expected data from both growth and inflation and concluded that policy was no

BoC June Deliberations Focused on Consumer and Core Inflation Strength

June 21, 2023 6:04 PM UTC

Global growth as seen as moving in line with expectations but resilience in core inflation, and in North America, consumer spending, was noted. Turning to Canada, the BoC stressed the strength of consumption within the stronger than expected Q1 GDP release but did see some signs of easing in labor m

Bank of Canada Resumes Tightening, Hawkish Tone Suggests Scope For More

June 7, 2023 2:43 PM UTC

In detailing a stronger than expected 3.1% annualized rise in GDP the BoC notes strength in consumption, increasing demand for interest-sensitive goods and a pick-up in housing activity, before going onto note labor market strength and concluding that excess demand looks more persistent than anticip

Bank of Canada Preview for June 7: Maintaining a Tightening Bias

May 31, 2023 4:08 PM UTC

The policy rate currently stands at 4.5%, with the last two meetings, on March 8 and April 12, having seen rates left unchanged. Since the April 12 meeting Canadian CPI slipped from 5.2% in February to 4.3% in March, but unexpectedly corrected higher to 4.4% in April. The core rates did however cont

In-Depth Research: Quick Roadmap Central Bank Forecast/Rationale - February 2023

February 22, 2023 10:44 AM UTC

M/T Quick Roadmap – Fundamental MMKT/CB Roadmap and Rationale
February 2023
US FEDERAL RESERVE
The February 1 December FOMC meeting saw the pace of tightening slowed to 25bps. Inflation has slowed, but January's CPI details still show broad based inflationary pressures at a pace well above the Fed's