Canada
In a widely expected move, the Bank of Canada (BoC) cut interest rates by a quarter of a percentage point for a third consecutive month in September, lowering the benchmark overnight rate to 4.25%. Policymakers also signaled further easing ahead. Both the…
In this Special Report, we assess the impact of monetary policy tightening on major economies. Interest rate sensitive GDP already slowed significantly in response to the aggressive rate hiking cycle. Despite the beginning of policy easing, our forward-looking indicators suggest monetary policy will continue to weigh on the economy.
Canadian headline CPI decelerated from 2.7% y/y to 2.5% in July, the slowest pace in over 3 years. Notably, core median and trimmed-mean CPI eased further than expected, to 2.4% and 2.7% y/y respectively, 0.1 ppt below anticipations. Lower prices for…
We have high conviction that continued labor market softening will tip the US economy into a recession by year-end or early next year. It will reverberate to the rest of the world given that the US has been the main driver of global demand in this cycle. …
The Bank of Canada (BoC) reduced its policy rate by 25bps for the second meeting in a row on Wednesday. We highlighted in a recent Insight that the soft June inflation print and weakening labor market increased the odds of more aggressive BoC easing. …
In this Insight, we look into the recent CPI release in Canada, and the possible implications for fixed-income market trades.
Markets had already been sussing out that the Bank of Canada (BoC) will cut rates for the second time when it meets next week, and this morning’s soft CPI report all but confirmed it. The last remaining obstacle in the way of another BoC rate cut was the…
The latest release of the Canadian Labour Force Survey indicated further softening of the labor market in the Great White North. The economy experienced a net loss in total employment, shedding 1,400 jobs compared to market expectations of a net creation of…
Concerns about the global economy have shifted from sticky inflation to faltering growth. Tight monetary policy is finally starting to bite. We suggest increasing portfolio defensiveness.
Image
Canada’s headline inflation rate for May surprised to the upside on Tuesday. The 0.6% month-on-month print and 2.9% year-on-year increase came in above expectations of 0.3% m/m and 2.6% y/y, respectively. Both…