Canada
The Bank of Canada held rates at 2.25% for a fourth consecutive meeting; a weak domestic economy still argues for looking through supply-side inflation. The hold was expected, and at 2.25%, the policy rate sits at the bottom of the BoC’s estimated 2.25%-3.25%…
The Bank of Canada’s 2026 Q1 Business Outlook Survey improved, but the domestic economy still had slack before the energy shock. The Q1 survey saw the headline index rising to -0.4 from -1.8 in Q4 of last year. The future sales index jumped to 25 from 13 and…
Volatility is high, but the path for yields is clearer than it looks. Across three oil scenarios, we show how policy responses shape fixed income markets and why the balance of risks still points to lower yields.
Interest rate volatility is very low across developed market fixed income. Investors should maximize the carry in their portfolios to outperform in a low rate vol environment.
Canadian January CPI came in cooler than expected, with inflation remaining within the BoC’s target range. Headline fell to 2.3% y/y from 2.4%, while core cooled to 2.4% from 2.5%. The average of the Bank of Canada’s core measures declined to 2.5%. The…
The January Canadian labor report missed estimates. The January LFS showed headline job losses of 24.8k, compared with a 10.1k gain in December. Unemployment fell to 6.5% from 6.8%, driven by lower labor force participation rather than stronger employment.…
Downside risks dominate Canada’s outlook, supporting further BoC easing and CAD steepeners. Canada’s employment data show an intriguing divergence. The widely followed Labour Force Survey (LFS) has stabilized, but its volatility and frequent revisions make it…
MacroQuant recommends a slight underweight in equities, favors a below-benchmark duration stance in fixed-income portfolios, remains bearish on the US dollar, has upgraded oil and copper to overweight, and is bullish on gold.
Downside risks dominate the Canadian outlook despite stabilization and a BoC pause. The Bank of Canada held the overnight rate at 2.25% for a second consecutive meeting, as expected. After cutting from 3.5% in early 2025, the BoC signaled at its October…
Fade US-Canada tariff threats. President Trump said over the weekend that he would impose 100% tariffs on Canada should it conclude a trade deal with China, a reversal from comments only days earlier encouraging such a deal. We view this as posturing ahead of…