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OTTAWA, Oct 17 (Reuters) - Business sentiment has softened in Canada and most firms now think a recession is likely, a Bank of Canada survey showed on Monday, but inflation expectations remain high, leaving the central bank little choice but to continue raising rates. The bank's Business Outlook Survey showed 77% of firms see price growth staying above 3% for the next two years. A separate survey showed near-term consumer inflation expectations at record highs, though longer term expectations have eased, providing some relief. "Still-high expectations for inflation will keep the Bank of Canada in rate hike mode," said Andrew Grantham, senior economist at CIBC Capital Markets, in a note. That is cause for concern for the central bank as it seeks to avoid a wage-price spiral, analysts said.

☆ Bank of Canada says persistent U.S. dollar strength could force interest rates higher
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +1 min

OTTAWA, Oct 14 (Reuters) - A continued U.S. dollar rally may mean the Bank of Canada will "have more work to do" on interest rates and it is something the central bank is watching closely, Governor Tiff Macklem said on Friday. The Canadian dollar has tumbled 8.5% versus the U.S. dollar since August, as aggressive interest rate hikes by the Federal Reserve and financial market volatility triggered gains for the safe-haven greenback. If that persists, it "will mean that, other things equal, we're gonna have more work to do on interest rates," Macklem told reporters after International Monetary Fund and World Bank annual meetings in Washington. "We'll be watching that closely." Register now for FREE unlimited access to Reuters.com Register(Reporting by Julie Gordon and Steve Scherer)((steve.scherer@thomsonreuters.com; +1-647-480-7889))Keywords: CANADA CENBANK/Register now for FREE unlimited access to Reuters.com RegisterOur Standards: The Thomson Reuters Trust Principles.

☆ Canadian economy surprises with 0.1% growth in July, August seen flat
▼ + stars: | 2022-09-29 | by ( Julie Gordon | ) www.reuters.com time to read: +2 min

A Canada Goose store in the CF Toronto Eaton Centre shopping mall in Toronto, Ontario, Canada December 13, 2021. REUTERS/Carlos Osorio/File PhotoOTTAWA, Sept 29 (Reuters) - Canadian economic activity edged up a surprise 0.1% in July, driven by strong oil sand production, while gross domestic product was most likely flat in August, Statistics Canada data showed on Thursday. Statistics Canada said growth in goods-producing industries more than offset the first decline in services-producing industries since January. Canada's agricultural sector also helped drive economic growth, with crop production up 7.2%, mainly on volumes of wheat and other grains. Register now for FREE unlimited access to Reuters.com RegisterDemand for Canadian wheat has increased since Russia's invasion of Ukraine, which Russia calls a special military operation, helping push up export volumes.

☆ Canada's economy unexpectedly grows in July, though momentum slows
▼ + stars: | 2022-09-29 | by ( Julie Gordon | ) www.reuters.com time to read: +3 min

The Canadian economy grew 0.1% in July, compared with analysts' forecast for a 0.1% decline, Statistics Canada data showed. Growth in goods-producing industries more than offset the first decrease in services-producing industries since January. "After a solid first half of the year, momentum appears to be slowing as multi-decade-high inflation and rapidly rising interest rates weigh on the economy," Benjamin Reitzes, Canadian rates and macro strategist at BMO Economics, said in a note. Hot inflation means the Bank of Canada will likely hike interest rates at its next decision in late October, but then the game may change, economists said. "The deceleration in economic momentum is why we see the Bank of Canada only hiking rates once more in October," Mendes said.

The "Summary of Deliberations," similar to meeting minutes released by other central banks, will be published roughly two weeks after each interest rate decision, starting with the Jan. 25 meeting, Canada's central bank said. The decision to release summaries comes as worries mount that the pace of rate increases - the central bank has lifted its policy rate by 300 basis points in six months - could lead to a recession. The IMF released its 98-page report on Wednesday, which followed a voluntary review with the Bank of Canada. The report included 10 recommendations, including that the bank publish summaries of its rate decisions and provide more transparency on its "bilateral collaborations" with government. The Bank of Canada said providing more information was not a "priority," in part because the bank has not intervened on the foreign exchange markets since 1998.

Governor of the Bank of Canada Tiff Macklem walks outside the Bank of Canada building in Ottawa, Ontario, Canada June 22, 2020. REUTERS/Blair Gable/File PhotoOTTAWA, Sept 26 (Reuters) - Inflation is too high in Canada, so the Bank of Canada needs to increase interest rates to slow spending and give the economy time to catch up, Governor Tiff Macklem said on Monday in a video posted by the central bank on Twitter. "Inflation is too high," Macklem said in a video tagged #AskTheBoC, echoing remarks made earlier this month after the central bank hiked its policy rate by 75-basis points to 3.25%. Register now for FREE unlimited access to Reuters.com RegisterThe Bank of Canada, like many of its global peers, is rapidly increasing interest rates in response to inflation running at levels not seen in decades. The central bank has lifted rates by 300 basis points in just six months as it looks to wrangle inflation back to the 2% target.

☆ Bank of Canada says not involved in FX intervention to shore up yen
▼ + stars: | 2022-09-22 | by ( ) www.reuters.com time to read: 1 min

OTTAWA, Sept 22 (Reuters) - The Bank of Canada said on Thursday it had not participated in any currency market intervention, after Japan moved earlier in the day to buy yen for the first time since 1998 to shore up its battered currency. read more"The Bank of Canada is not participating in any foreign-exchange intervention," said Paul Badertscher, director of media relations at Canada's central bank. Register now for FREE unlimited access to Reuters.com RegisterReporting by Julie Gordon in OttawaOur Standards: The Thomson Reuters Trust Principles.

☆ Collectors clamor for rare Queen Elizabeth coins and notes
▼ + stars: | 2022-09-21 | by ( Julie Gordon | ) www.reuters.com time to read: +5 min

A Canadian $20 note from 1935, featuring a portrait 8-years-old Princess Elizabeth (later Queen Elizabeth), which will be auctioned later this month is seen in this undated handout picture provided September 20, 2022. In a separate online auction, a 1935 $20 bill featuring Elizabeth was being bid at C$2,100 with 10 days to go. He is also eager to see the first coins featuring Charles as king. Central banks in Canada, Australia and New Zealand have all said bills featuring Queen Elizabeth will remain in circulation for years to come. Indeed, Commonwealth countries looking to use King Charles' image on coins and notes will likely find themselves in a queue behind Britain.

OTTAWA, Sept 20 (Reuters) - Inflation in Canada remains "too high" but is headed in the right direction, a Bank of Canada official said on Tuesday, adding that the central bank will do whatever is needed to bring price increases back to target. While we're headed in the right direction, that's still too high," Beaudry said in prepared remarks provided ahead of the speech. While some have argued policymakers need to engineer a recession to avoid this, Beaudry said the bank is working to convince Canadians the current period of high inflation is temporary and it will tame surging prices. Still, economists said if consumer and business surveys due out next month show inflation has become more entrenched, the Bank of Canada may have to change its tune. The Bank of Canada has boosted its policy rate by 300-basis points in six months and earlier this month signaled it was not yet done.

☆ Canadian inflation rate slows to 7.0%, though food prices hit 41-year high
▼ + stars: | 2022-09-20 | by ( Julie Gordon | ) www.reuters.com time to read: +2 min

The country's annual inflation rate slowed to 7.0% in August, below analyst forecasts of 7.3% and down from 7.6% in July. The deceleration was largely due to lower gasoline prices and slower gains in the shelter index, Statscan said. On the month, the consumer price index fell 0.3%, the largest decline since early in the COVID-19 pandemic. While inflation appears to be easing off peak levels, it remains far above the Bank of Canada's 2% target. The Canadian dollar was trading 0.4% lower at 1.33 per U.S. dollar, or 75.19 U.S. cents.

☆ Canada home prices post record monthly decline in August -Teranet
▼ + stars: | 2022-09-20 | by ( ) www.reuters.com time to read: +1 min

Register now for FREE unlimited access to Reuters.com RegisterA for sale sign is displayed outside a home in Toronto, Ontario in Toronto, Ontario, Canada December 13, 2021. The Teranet–National Bank National Composite House Price Index, which tracks repeat sales of single-family homes in major Canadian markets, showed prices fell a record 2.4% in August from July, led by sharp declines in Hamilton, Ontario and Halifax, Nova Scotia. The index is now 4.1% below the May peak, with Hamilton down 10.5%, Halifax down 8.7% and Toronto down 8.3%. The Teranet index tracks closings, so it typically lags realtor sales data by three to five months. Register now for FREE unlimited access to Reuters.com RegisterReporting by Julie Gordon in Ottawa; Editing by David GregorioOur Standards: The Thomson Reuters Trust Principles.

☆ Bank of Canada: inflation is still too high, but moving in the right direction
▼ + stars: | 2022-09-20 | by ( ) www.reuters.com time to read: +1 min

OTTAWA, Sept 20 (Reuters) - The Bank of Canada on Tuesday said inflation remained "too high" even as data showed price pressures were easing off peak levels, and pledged to continue to do whatever was needed to bring it back to target. While we're headed in the right direction, that's still too high," Beaudry said in prepared remarks provided ahead of the speech. Inflation slowed again in August, though at 7.0% it remains well above target. The three core measures of inflation, which taken together are seen as a better indicator of underlying price pressures, also eased slightly. (Reporting by Julie Gordon, editing by David Ljunggren)((Reuters Ottawa bureau, + 1 647 480 7921; david.ljunggren@tr.com))Register now for FREE unlimited access to Reuters.com RegisterOur Standards: The Thomson Reuters Trust Principles.

Reuters GraphicsThe broadening of price increases, increased wage settlements, as well as rising consumer and business inflation expectations are signs that inflation is becoming more entrenched in the economy, economists told Reuters. That is an outcome that the Bank of Canada has hoped to avoid, saying it would require more aggressive interest rate hikes to bring inflation back under control. Economists at Desjardins Group and Oxford Economics also foresee aggressive rate hikes leading to a recession, though they cast it as a mild downturn. We need to cool the economy to get inflation back to target," Senior Deputy Governor Carolyn Rogers told reporters earlier this month. As for headline inflation, the central bank has it returning to 2% in 2024.

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