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US ‘drives the bus’ on long-term interest rates – but BoC likely to push ahead with cuts, suggests economist Decision makers at the Bank of Canada could be weighing up possible interest rate cuts in 2024 – but they’re sure to be keeping a close eye on developments south of the border as they consider…

Jobless Rates Hits 22-Month High–Led by Losses in Finance and Real Estate EmploymentToday’s StatsCanada Labour Force Survey for November was a mixed bag. Total employment gains were stronger than expected. However, the rising unemployment rate and drop in hours worked were signs of mounting economic weakness, especially in the financial and real estate sectors.  Employment…

The Table Is Set For Rate Cuts In 2024 The Canadian economy weakened far more than expected in the third quarter, down 1.1% annually. However, the Q2 figures were revised up significantly from a 0.2% decline to a rise of 1.4%. Such are the vagaries of economic data. The Canadian economy is contracting despite the…

The Bank of Canada’s path on interest rates has grabbed headlines and dominated the news cycle throughout 2023 – but its final rate decision of the year isn’t expected to hold many surprises. The central bank has left its policy rate, which leads variable mortgage rates in Canada, unchanged in its last two announcements, with…

Good News On the Inflation Front Suggests Policy Rates Have Peaked Today’s inflation report showed a continued improvement, mainly due to falling year-over-year (y/y) gasoline prices. The October Consumer Price Index (CPI) rose 3.1% y/y, down from the 3.8% rise in September. There were no surprises here, so markets moved little on the news. Excluding…

Home Sales Plummet In October Housing affordability is the number-one issue causing the significant decline in housing activity, adding to PM Justin Trudeau’s political problems. With the growing impact of unaffordable housing and the slowing labour market, activity in the real estate market should remain subdued for the rest of this year. Home sales dropped 5.6% month-over-month…

Weak October Jobs Report Likely Takes Further BoC Rate Hikes Off The Table Today’s StatsCanada Labour Force Survey for October was weak across the board. Total job gains were meagre, full-time jobs fell, hours worked were flat, wage inflation eased (a bit), and the unemployment rate rose. Employment changed little in October, up only 17,500 (0.1%),…

Hawkish Hold By The Bank of Canada The Bank of Canada today held its target for the overnight rate at 5%, as was widely expected. The central bank continues to normalize its balance sheet through quantitative tightening, reducing its Government of Canada bonds holdings.  The Monetary Policy Report (MPR) detailed a slowdown in global economic growth…

Good News On the Inflation Front Suggests Policy Rates Have Peaked Today’s inflation report for September was considerably better than expected, ending the three-month rise in inflation. Not only did the headline inflation rate fall, but so did the core measures of inflation on a year-over-year basis and a three-month moving average basis. This, in…

Increasing Mortgage Rates Weighed Heavily On Housing In September Mortgage rates continued to rise in September after BoC tightening and one of the largest bond selloffs in history. Yields have retraced some of their rise more recently, but demand for new and existing homes has slowed. According to data released by the Canadian Real Estate…