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☆ Bank of Canada seen hiking rates quarter point to tame stubborn inflation
▼ + stars: | 2023-07-10 | by ( Steve Scherer | ) www.reuters.com time to read: +2 min

In June, the central bank raised its overnight rate to a 22-year high of 4.75% after a five-month pause, saying monetary policy was not restrictive enough. Data in the past month showed some signs of a slowdown - inflation cooling to 3.4%, a tepid May jobs report and a surprise trade deficit in May. "We expect the BoC to take the policy rate 25 basis points higher to 5%." Twenty of 24 economists surveyed by Reuters expect the bank to lift rates by another quarter-point and then hold well into 2024. Reporting by Steve Scherer, additional reporting by Fergal Smith; Editing by David GregorioOur Standards: The Thomson Reuters Trust Principles.

Persons: Jay Zhao, Murray, Andrew Grantham, Steve Scherer, Fergal Smith, David Gregorio Our Organizations: OTTAWA, Bank of Canada, BoC, Monex, Reuters, CIBC Capital Markets, Thomson Locations: Canada

☆ Canadian port strike talks resume, supported by federal mediators
▼ + stars: | 2023-07-09 | by ( ) www.reuters.com time to read: +1 min

The BCMEA and the International Longshore and Warehouse Union Canada (ILWU Canada) met on Saturday, supported by federal mediators, the statement said. Some 7,500 port workers went on strike on July 1 for higher wages, upending operations at the Port of Vancouver and Port of Prince Rupert - key gateways for exporting the country's natural resources and commodities as well as for bringing in raw materials. ILWU Canada did not immediately reply to a request for comment. The Canadian Manufacturers & Exporters (CM&E) industry body said the strike is disrupting C$500 million ($377 million) in trade every day. ($1 = 1.3271 Canadian dollars)Reporting by Fergal Smith; Editing by Mark PorterOur Standards: The Thomson Reuters Trust Principles.

Persons: Port of Prince Rupert, Saturday Alberta Premier Danielle Smith, BCMEA, Fergal Smith, Mark Porter Organizations: TORONTO, British Columbia Maritime Employers Association, Warehouse Union, Port, Saturday Alberta Premier, ILWU Canada, Canadian Manufacturers, Thomson Locations: Pacific Canada, British, Canada, Port of Vancouver, Port of, Vancouver

☆ Canada port strike may add to inflation concerns ahead of rate decision
▼ + stars: | 2023-07-06 | by ( Fergal Smith | ) www.reuters.com time to read: +3 min

[1/3] A view shows placards as longshoremen with the International Longshore and Warehouse Union Canada (ILWU) strike outside the Port of Vancouver's Neptune Bulk Terminals in North Vancouver, British Columbia, Canada July 5, 2023. Some 7,500 dock workers went on strike on Saturday for higher wages, upending operations at two of Canada's three busiest ports, the Port of Vancouver and Port of Prince Rupert. Money markets expect the central bank to tighten further, possibly as soon as at a policy decision next Wednesday. The Canadian Manufacturers & Exporters (CM&E) industry body said the strike is disrupting C$500 million in trade every day. ($1 = 1.3360 Canadian dollars)Reporting by Fergal Smith, editing by Steve Scherer and Josie KaoOur Standards: The Thomson Reuters Trust Principles.

Persons: Chris Helgren, Port of Prince Rupert, Andrew Grantham, Seamus O'Regan, It's, Robert Kavcic, Fergal Smith, Steve Scherer, Josie Kao Organizations: Warehouse Union, REUTERS, TORONTO, Bank of Canada, BoC, CIBC Capital Markets, Bank of, Reuters, Twitter, Canadian Manufacturers, BMO Capital Markets, Thomson Locations: of, North Vancouver, British Columbia, Canada, Port of Vancouver, Port of, Bank of Canada

☆ Canadian dollar edges higher as oil prices climb
▼ + stars: | 2023-07-04 | by ( Fergal Smith | ) www.reuters.com time to read: +2 min

Summary Canadian dollar strengthens 0.2% against the greenbackPrice of U.S. oil increases 2%Canada manufacturing PMI dips to 48.8 in JuneCanadian bond yields rise across the curveTORONTO, July 4 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Tuesday as oil prices rose and despite domestic data that showed factory activity slowing further in June. Speculators have slashed their bearish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission showed on Friday. The price of oil , one of Canada's major exports, climbed 2% to $71.16 a barrel as markets weighed August supply cuts by top exporters Saudi Arabia and Russia against a weak global economic outlook. Contraction in Canada's manufacturing sector deepened slightly in June as an uncertain economic outlook weighed on both domestic and foreign demand. Canadian government bond yields were higher across the curve, with the 10-year up 6.4 basis points at 3.335%.

Persons: greenback Price, Fergal Smith, Josie Kao Organizations: greenback, Canadian, U.S, U.S . Commodity Futures Trading, P Global Canada Manufacturing, Bank of Canada, BoC, Thomson Locations: Canada, TORONTO, Saudi Arabia, Russia

The central bank is worried that the Canadian economy is running too hot for inflation to return to its 2% target and that if it waits to act, inflation expectations could rise, making matters worse. The central bank lifted its benchmark rate to a 22-year high of 4.75% this month and is expected to tighten further in July or September. A hard landing for the economy, or a recession, could raise unemployment, something the BoC has been hoping to avoid. "I'm not going to be betting against interest rates and I'm not going to be betting against policy lags." The data has left analysts pushing back their forecasts of a slowdown to later in 2023 or in 2024 but accompanied by higher than anticipated interest rates.

Persons: Karl Schamotta, David Rosenberg, I'm, Royce Mendes, Fergal Smith, Steve Scherer, Denny Thomas, Stephen Coates Organizations: TORONTO, Bank, Bank of Canada's, BoC, Bank of Canada, Rosenberg Research, Desjardins, Thomson Locations: United States, Data, Toronto, Ottawa

☆ Canadian dollar hits 2-week low as rate hike bets recede
▼ + stars: | 2023-06-28 | by ( Fergal Smith | ) www.reuters.com time to read: +2 min

The loonie was trading 0.5% lower at 1.3250 to the greenback, or 75.47 U.S. cents, after touching its weakest intraday level since June 15 at 1.3276. "The market is losing confidence that the Bank of Canada will hike again next month," said Adam Button, chief currency analyst at ForexLive. Money markets see a 55% chance of a rate hike at the Bank of Canada's next policy decision on July 12, down from 64% before data on Tuesday that showed inflation easing to its slowest pace in two years. "The Bank of Canada is going to see economic weakness developing in Canada." One potential measure of support for the loonie was a rebound in the price of oil, one of Canada's major exports.

Persons: Adam Button, Button, Jerome Powell, Fergal Smith, Jonathan Oatis Organizations: greenback, Canadian, U.S, Bank of Canada, Bank of, of Canada, U.S ., Thomson Locations: TORONTO, Bank of Canada, Bank of Canada's, Canada

Variable rate mortgages in Canada typically require borrowers to make regular payments in fixed amounts. WHAT IS THE EXTENT OF MORTGAGE AMORTIZATION EXTENSION? Both banks had no variable-rate mortgages with amortizations greater than 30 years prior to the start of rate hikes. If interest rates stay high over the next few years, as the central bank has warned, it raises questions about customers' ability to service bigger than anticipated debt at higher rates during renewals. The big banks said most customers are able to cope with higher interest rates as they had passed a rigorous stress test to handle higher interest rates.

Persons: Royce Mendes, Carolyn Rogers, OSFI, Nivedita Balu, Fergal Smith, Steve Scherer, Denny Thomas, Conor Humphries Organizations: TORONTO, Statistics Canada, Royal Bank of Canada, CIBC, Bank of Nova, National Bank, Bank of Canada, BoC, Thomson Locations: Canada, United States, Bank of Nova Scotia, amortization, Toronto, Ottawa

The economy shed a net 17,300 jobs in May, entirely in full-time work, while the jobless rate inched up to 5.2%, Statistics Canada said. Analysts surveyed by Reuters had forecast a net gain of 23,200 jobs and for the unemployment rate to edge up to 5.1% in May after staying at 5.0% since December. A series of surprisingly strong economic data and stubbornly high inflation led the Bank of Canada to raise its overnight rate to a 22-year high of 4.75% on Wednesday. "While this is an ugly set of jobs data, the labour force survey is notoriously volatile," said Royce Mendes, head of macro strategy at Desjardins Group. Reports on jobs, inflation and gross domestic product are due out ahead of the next policy announcement on July 12.

Persons: Andrew Grantham, Paul Beaudry, Beaudry, Royce Mendes, Ismail Shakil, Steve Scherer, Fergal Smith, Dale Smith, Susan Fenton, Nick Macfie, Jonathan Oatis Organizations: OTTAWA, Statistics, Reuters, Bank of Canada, Bank of, CIBC Capital Markets, Desjardins Group, Canadian, Thomson Locations: Canada, Statistics Canada, Bank of Canada, Ottawa, Toronto

OTTAWA, June 7 (Reuters) - The Bank of Canada on Wednesday hiked its overnight rate to a 22-year high of 4.75%, and markets and analysts immediately forecast yet another increase next month to ratchet down an overheating economy and stubbornly high inflation. Noting an uptick in inflation in April and the fact that three-month measures of core inflation remained high, the Bank of Canada (BoC) said that "concerns have increased that CPI inflation could get stuck materially above the 2% target." However, Canada Finance Minister Chrystia Freeland said the economic rebound from the COVID-19 pandemic and Russia's invasion of Ukraine has been stoking price increases. "To bring demand lower, which is the bank's goal to achieve their 2% inflation target, we just simply need more tightening." The BoC said it would continue to assess economic indicators going forward to see if they "are consistent with achieving the inflation target."

Persons: Derek Holt, Paul Beaudry, Canada's, Pierre Poilievre, Justin Trudeau, Chrystia Freeland, Andrew Kelvin, Steve Scherer, David Ljunggren, Fergal Smith, Divya Rajagopal, Nivedita Balu, Mark Porter Organizations: OTTAWA, Bank of Canada, Wednesday, Canadian, Scotiabank, BoC, Conservative Party, Liberal, Canada Finance, TD Securities, Thomson Locations: British Columbia, Ukraine, Canada, Toronto

☆ Analysis: Strong economy puts Bank of Canada's 4-month rate hike pause in doubt
▼ + stars: | 2023-06-05 | by ( Steve Scherer | ) www.reuters.com time to read: +4 min

Inflation, which peaked at 8.1% last year, accelerated for the first time in 10 months in April to 4.4%, more than double the Bank of Canada's 2% target. The recent recovery in Canada's housing market is also putting pressure on prices, analysts say. "The Bank of Canada's penchant for surprising traders means that nothing can be ruled out," said Royce Mendes, head of macro strategy at Desjardins Group. Mendes said there could be more than one rate hike in the cards, and Canadians should "brace themselves for a further tightening in financial conditions this summer". "The latest round of data adds weight to our view that the Bank will need to conduct an insurance rate hike at either of its next two meetings," said Jay Zhao-Murray, FX analyst at Monex Canada.

Persons: Stephen Brown, Royce Mendes, Mendes, Macklem, Jay Zhao, Murray, Steve Scherer, Fergal Smith, Denny Thomas, Daniel Wallis Organizations: OTTAWA, Bank of Canada, BoC, Bank of Canada's, North, Capital Economics, Reuters, Federal Reserve, Desjardins Group, Monex Canada, Thomson Locations: North America, United States, States

While a federal election is not due until 2025, housing affordability is among the top concerns for Canadians who have grappled with supply shortages. The Liberal Party government's ambitious plan to welcome 500,000 immigrants per year by 2025, or about 1.25% of its population, is expected to fuel robust demand for housing. In April 2022, the Liberal government announced plans to double housing construction over the next decade. It's been 8 years (since he took power), and now, housing costs have doubled," Poilievre said on Twitter earlier this month. Speaking with the heads of Canada's municipalities last week, Trudeau said the government's next "long term infrastructure" plan will be revealed this autumn.

Persons: Justin Trudeau, Randall Bartlett, Bartlett, Pierre Poilievre, Trudeau, Poilievre, Darrell Bricker, they're, Bricker, James Laird, Laird, Fergal Smith, Steve Scherer, Marguerita Choy Organizations: TORONTO, Bank of Canada, Liberal Party, Desjardins, Liberal, Housing, Canada Mortgage, Housing Corporation, Canadian Home Builders ' Association, Reuters, Conservative Party, Twitter, Toronto Area, Public Affairs, Thomson Locations: Toronto, Ottawa

☆ Rising risk appetite lifts Canadian dollar to two-week high
▼ + stars: | 2023-06-01 | by ( Fergal Smith | ) www.reuters.com time to read: +2 min

The loonie was trading 0.9% higher at 1.3445 to the greenback, or 74.38 U.S. cents, after touching its strongest intraday level since May 16 at 1.3434. The U.S. House of Representatives passed a bill to suspend the U.S. debt ceiling on Wednesday evening. The Senate will stay in session until it passes the measure, Democratic Majority Leader Chuck Schumer said on Thursday. The rebound in oil prices was also supportive of the loonie, Sahota said. Domestic data showed manufacturing activity slowed in May as high inflation and inventory cutting held back customer demand.

Persons: Amo Sahota, Chuck Schumer, Sahota, Fergal Smith, Will Dunham Organizations: U.S, Canadian, FX, The U.S . House, Democratic, Wall, P Global Canada Manufacturing, Thomson Locations: TORONTO, U.S, Australia, New Zealand, San Francisco, The

April's unexpected acceleration in inflation to 4.4% from 4.3% in March has some economists forecasting a hike later this year. "Inflation has come down. We expect it will continue to come down," Macklem said when asked about the inflation figures published this week. He did, however, acknowledge that April inflation "did come in stronger than we expected." "While most households are proving resilient to increases in debt-servicing costs, early signs of financial stress are emerging," particularly among recent home buyers, according to the so-called Financial System Review.

☆ Canada housing market upturn could delay shift to BoC rate cuts
▼ + stars: | 2023-05-14 | by ( Fergal Smith | ) www.reuters.com time to read: +3 min

The housing market's upturn comes after the Bank of Canada paused its interest rate hiking campaign last month, leaving the benchmark rate at a 15-year high of 4.50% since January. A rebound in the housing market could boost activity and contribute directly to price pressures. "The Bank of Canada at the end of the day is probably not going to be too thrilled if the housing market really starts to ramp up," said Robert Kavcic, a senior economist at BMO Capital Markets. In addition, variable-rate borrowers have been sheltered from higher interest rates after lenders temporarily extended the period over which their debt is amortized, keeping their payments the same. But there are also tailwinds to support a recovery, including supply shortfalls, record immigration and labor market strength, analysts said.

☆ Canada's Ivey PMI shows activity expanding at slower pace in April
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: 1 min

TORONTO, May 4 (Reuters) - Canadian economic activity expanded at a slower pace in April as growth in employment slipped and inventories declined, Ivey Purchasing Managers Index (PMI) data showed on Thursday. The seasonally adjusted index fell to 56.8 from 58.2 in March. The Ivey PMI measures the month to month variation in economic activity as indicated by a panel of purchasing managers from across Canada. The gauge of employment declined to an adjusted 55.8 from 60.3 in March, while the inventories index was down at 48.6 from 54.5. The unadjusted PMI fell to 55.6 from 65.2.

☆ Toronto home prices rise for third month in April
▼ + stars: | 2023-05-03 | by ( Fergal Smith | ) www.reuters.com time to read: +1 min

[1/2] A for sale sign is displayed outside a home in Toronto, Ontario in Toronto, Ontario, Canada December 13, 2021. The average price of a GTA home rose to C$1.153 million ($846,425) in April, up 4% from March, Toronto Regional Real Estate Board (TRREB) data showed on Wednesday. On a year-over-year basis, the average price remained lower, but the pace of decline slowed to 7.8% from 14.6% in March. The average price was 13.6% below the February 2022 peak. "Many buyers have come to terms with higher borrowing costs and are taking advantage of lower selling prices compared to this time last year," TRREB President Paul Baron said in a statement.

☆ Canada ends Sudan evacuation flights amid dangerous conditions
▼ + stars: | 2023-04-30 | by ( ) www.reuters.com time to read: +1 min

"Because of the dangerous conditions, and in concert with decisions made by our allies, no further Canadian flights are planned from the Wadi Seidna airfield," Anand told a news conference. There remain in Sudan roughly 230 Canadian affected persons seeking assistance and information through Global Affairs Canada, Anand said. It has since conducted six flights, including two on Saturday, airlifting almost 550 people, while approximately 400 Canadians and permanent residents have been evacuated, including on Canadian and allied flights, Anand said. The government is working with allies to find alternative departure options, including via Port Sudan, said Anand. Britain has arranged an extra evacuation flight from Port Sudan in eastern Sudan which will depart on Monday, the government said on Sunday.

☆ Bank of Canada rate-cut bets recede as core inflation proves sticky
▼ + stars: | 2023-04-26 | by ( Fergal Smith | ) www.reuters.com time to read: +3 min

[1/2] A sign is pictured outside the Bank of Canada building in Ottawa, Ontario, Canada, May 23, 2017. The BoC has made greater progress in slowing inflation than some major peers, including the Federal Reserve and European Central Bank. Still, the rise in inflation expectations could be another reason for the Canadian central bank to be cautious about easing rates. The central bank has left its benchmark interest rate on hold for two straight meetings after lifting it to a 15-year high of 4.50%. Those rate hikes have contributed to inflation, by driving up mortgage borrowing costs, but the main aim is to slow the economy.

☆ Canadian housing starts slow as BoC rate hikes weigh
▼ + stars: | 2023-04-19 | by ( Fergal Smith | ) www.reuters.com time to read: +1 min

TORONTO, April 19 (Reuters) - Canadian housing starts fell more than expected in March, contributing to a slower trend in recent months that follows a rapid increase in borrowing costs, data from the national housing agency showed on Wednesday. The seasonally adjusted annualized rate (SAAR) of housing starts fell 11% to 213,865 units from a revised 240,927 units in February, the Canadian Mortgage and Housing Corporation (CMHC) said. "The SAAR of housing starts and the trend appear to be returning to pre-pandemic levels," Bob Dugan, CMHC's chief economist, said in a statement. The Bank of Canada has lifted its benchmark interest rate to a 15-year high of 4.50% to tackle inflation. For the first quarter, starts averaged 223,000, the weakest quarter since the depth of the COVID-19 pandemic in early-2020, Robert Kavcic, a senior economist at BMO Capital Markets, said in a note.

☆ Canadian housing starts fall 11% in March -CMHC
▼ + stars: | 2023-04-19 | by ( ) www.reuters.com time to read: 1 min

TORONTO, April 19 (Reuters) - Canadian housing starts fell more than expected in March compared with the previous month as groundbreaking decreased on multiple unit and single-family detached urban homes, data from the national housing agency showed on Wednesday. The seasonally adjusted annualized rate of housing starts fell 11% to 213,865 units from a revised 240,927 units in February, the Canadian Mortgage and Housing Corporation (CMHC) said. Economists had expected starts to fall to 237,800. Reporting by Fergal Smith; Editing by Chizu NomiyamaOur Standards: The Thomson Reuters Trust Principles.

☆ TSX notches 6-week high as investors cheer US bank earnings
▼ + stars: | 2023-04-14 | by ( Fergal Smith | ) www.reuters.com time to read: +2 min

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) rose 15.42 points, or 0.1%, to 20,579.91, its highest closing level since March 3. "Good bank earnings out of the U.S. spilled over into Canada," said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth. Canadian banks had been pressured in recent weeks by the banking stress in the United States and Europe. The Toronto market's heavily-weighted financials sector added 0.2%, while energy was up 0.3% as oil added to recent gains. Reporting by Shristi Achar A in Bengaluru; Editing by Shilpi MajumdarOur Standards: The Thomson Reuters Trust Principles.

☆ Bank of Canada discussed raising rates at latest policy meeting -governor
▼ + stars: | 2023-04-14 | by ( ) www.reuters.com time to read: +1 min

April 14 (Reuters) - The governing council of the Bank of Canada discussed raising interest rates at its policy meeting earlier this week before deciding to leave them on hold, the central bank's governor, Tiff Macklem, said on Friday. Asked whether any council members were in favor of hiking rates at the meeting, Macklem said: "When I say that we've discussed whether we've done enough, that does imply that one of the things we discussed is whether we need to raise rates." On Wednesday, the Canadian central bank kept its benchmark interest rate at 4.50%, as expected, but struck a hawkish tone, playing down market expectations for a rate cut this year as the risk of a recession diminished. Macklem reiterated on Friday that interest rates may need to stay "higher for longer" to get inflation back to the central bank's 2% target. The central bank estimates the neutral interest rate -- one that neither stimulates nor constrains the economy -- to be a range between 2% and 3%.

☆ Top Bank of Canada officials speak after rate decision
▼ + stars: | 2023-04-12 | by ( ) www.reuters.com time to read: +2 min

MACKLEM ON POTENTIAL FOR NEGATIVE QUARTERS FOR GROWTH"We're forecasting small positives. When you're forecasting small positives you can't rule out that there's going to be a couple quarters of small negatives. MACKLEM ON NEEDING A PERIOD OF WEAK GROWTH"I would remind you that we actually need a period of weak growth. We're expecting pretty weak growth for the rest of the year, something a little less than 1%." MACKLEM ON NOT FORECASTING A MAJOR CONTRACTION"We're not forecasting a major contraction.

☆ Bank of Canada seen on hold even as economy accelerates
▼ + stars: | 2023-04-09 | by ( Fergal Smith | ) www.reuters.com time to read: +4 min

Last month, the Bank of Canada became the first major global central bank to pause its rate-hiking campaign, after lifting its benchmark rate to a 15-year high of 4.50%. This will carry through to higher economic growth." That is welcome news for most, but not for Bank of Canada (BoC) Governor Tiff Macklem, as it could call into question his decision to announce a conditional rate pause in January. "We suspect that the Bank of Canada will view the apparent strength in Q1 GDP similarly, and increase its estimate of potential growth." Canada's economy faces headwinds from higher borrowing costs and financial stability concerns, while inflation has cooled more than in the United States, said Nathan Janzen, assistant chief economist at Royal Bank of Canada.

The economy gained a net 34,700 jobs, almost entirely in the private sector, and the unemployment rate held steady at 5.0%, Statistics Canada reported. Analysts surveyed by Reuters had forecast that a net 12,000 jobs would be gained in March and the unemployment rate would edge up to 5.1%. Since December, the jobless rate has stayed just a notch above the record low of 4.9% observed in mid-2022. Thursday's jobs figures as well as robust GDP data released last week are likely to complicate the central bank's plans to avoid further rate moves. There were 18,800 full-time jobs added in the month, and 15,900 part-time jobs.

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