Canada
Canadian June inflation came in colder than estimates, reinforcing the case for fading CORRA pricing. Headline CPI ticked down to 2.8% y/y, within the Bank of Canada’s 1%-to-3% target range. The BoC’s preferred core measures also cooled, with median down to…
The Bank of Canada held rates, reinforcing its intention to stay on hold in the near term. The BoC kept rates unchanged for a sixth consecutive meeting, as expected. It also removed references to both cuts and hikes from its press release, reinforcing its…
The June Canadian employment report was marginally better than estimates, but the broader labor backdrop remains subdued. Employment rose by 18.2k, slowing from 87.8k in May. Job growth was however concentrated almost entirely in part-time and temporary…
The USD/CAD is oversold but faces unique political risk going into the fall. The CAD is one of the worst-performing G10 currencies year-to-date, despite a 30% increase in oil prices over the same time frame. Widening real interest rate…
The Bank of Canada’s Q2 Business Outlook Survey pointed to a fragile economy, supporting the case for fading hikes priced into the CORRA curve. While the BOS indicator was roughly unchanged at -0.4, the report’s underlying details showed broad deterioration…
Canadian May inflation was hotter than estimates, but the underlying inflation picture remains much more muted. Headline CPI rose to 3.2% from 2.8%, moving above the Bank of Canada’s 1%-to-3% target range. The increase, however, was driven by energy, which…
The Bank of Canada kept rates unchanged and still sees two-sided risks around the inflation outlook. The policy rate was left at 2.25% for a fifth consecutive meeting, in line with expectations. At 2.25%, it remains at the bottom of the BoC’s estimated…
The Bank of Canada left rates unchanged and emphasized inflation risks from higher oil prices. We discuss why inflation and labor market data argue against the tightening currently priced.
Canada’s labor market is showing early signs of stabilization, but not sufficient for the Bank of Canada to begin raising rates. Employment increased by 88k in May, well above expectations of 10k, led by a jump in full-time employment, while the unemployment…
Canada’s growth backdrop has weakened sharply. Q1 GDP fell 0.1% on a quarterly annualized basis, missing expectations for 1.5% growth, after Q4 was revised down to a 1% contraction. The drag is broadening. Business capital investment fell 0.7% q/q, its…