Bank of Canada Holds Rates and Bond-Buying Steady Much has changed since the Bank of Canada’s last decision on January 20. While the second pandemic wave was raging, new lockdowns were implemented in late 2020, and there were fears that the economy, in consequence, was likely to grow at a 4.8% annual rate in Q4 […]

Strong Canadian Economic Growth in Q4 and January This morning’s Stats Canada release showed that economic growth in the final quarter of last year was a surprisingly strong 9.6% (annualized). The surge in growth in January was even more interesting, estimated at a 0.5% (not annualized) pace. If these numbers pan out, it means that Canada […]

Longer-term Yields are Rising Despite Central Bank Inaction While central banks hold overnight rates at record lows, anchoring short-term interest rates and the prime rate, mid-to-long-term government yields have been rising since early this month. As the chart below shows, the 5-year Government of Canada bond, upon which mortgage rates are generally tethered, are currently at […]

Housing Continued to Surge in January Today the Canadian Real Estate Association (CREA) released statistics showing national home sales hit another all-time high in January 2021. Canadian home sales increased 2.0% month-on-month (m-o-m) building on December’s 7.0% gain. On a year-over-year (y-o-y) basis, existing home sales surged 35.2%. As the chart below shows, January activity […]

Bank of Canada Still Expects No Rate Increases Until 2023 The Bank of Canada, this morning, released its January Monetary Policy Report (MPR), showing they expect to keep overnight interest rates at its “effective lower bound” of 0.25% until 2023 (see chart below). To reinforce this commitment and keep interest rates low across the yield […]

2020 Was a Blockbuster Year for Housing Despite the fears leading into the pandemic last Spring, 2020 marked a record number of home resales as new listings lagged and prices climbed. December housing data released by the Canadian Real Estate Association (CREA) today shows national home sales surged 7.2% month-over-month (m-o-m) at a time of […]

Canadian employment fell 62,600 last month, a bit weaker than expected, following seven months of recovery (see chart below). The rapid rise in COVID cases and the ensuing lockdown measures in many key regions caused the net loss in jobs in the mid-December survey.  Especially hard hit were workers at restaurants and hotels who suffered a […]

The next Bank of Canada meeting is January 20, 2021, below is the summary of todays (Dec 9, 2020) meeting.   The Bank of Canada today maintained its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The […]

    Rebounding Q3 Canadian Economy Stalls in Q4 The Canadian economy rebounded sharply in the third quarter, posting its most rapid expansion ever. Still, it was a lower than expected gain, and early data show that momentum is quickly fading in the face of a second wave of the pandemic. Gross domestic product rose by […]

” ……. the biggest Covid-19 fiscal response in the industrialized world” … is that a handle that Canada wants to be known for?   Federal Fiscal Update–Finance Minister Freeland’s Debut Justin Trudeau’s government, which has delivered the biggest Covid-19 fiscal response in the industrialized world, announced plans for another dose of stimulus and vowed to continue priming the […]