Ahead of the storm clouds, the American job market was humming along nicely, a result that says little about where things will stand as the recent spike in energy prices begins to bite, |
All told, a fairly strong reading that will only buttress the Bank of Canada's case for remaining hawkish. |
Although financial markets have confidently priced-in a May rate hike, low core inflation implies that the case for risking growth by pushing rates higher is far from clear. If, as we expect, the economy were to show signs of a slowing by May, the Fed will want to give it the benefit of the doubt by standing pat at that point. |
August's 169,000 jobs gain, coupled with a 44,000 upward revision to the prior two months, left payroll employment just about where the market expected. |
Central banks continue to be guided by macroeconomic models that relate to an economy that no longer exists. |
Given all the leverage that the household sector has built up, their confidence in rising home equity has been an important part of their willingness to take on all that (mortgage) debt. |
I place more emphasis on jobs numbers than on confidence surveys in estimating consumers' attitudes. And that has not looked promising. |
If markets felt the Bank of Canada was going to press on with rate hikes after the Fed stopped, that could fuel an overheated Canadian dollar, providing too much of a braking force on exports. |
If, as we expect, the economy were to show signs of a slowing by May, the Fed will want to give it the benefit of the doubt by standing pat at that point. |
In Canada, CPI inflation will be everywhere in energy, and nowhere in anything else, mirroring what we saw in the U.S. figures for September, |
In Canada, CPI inflation will be everywhere in energy, and nowhere in anything else, mirroring what we saw in the U.S. figures for September. |
It's now evident that the US economy is headed for a very brisk first-quarter [growth] pace, with our above-consensus 4.8 percent real GDP forecast looking, if anything, too conservative. |
It's oil and natural gas prices that move the hearts and minds of those following the Canadian dollar these days. |
It's pretty clear after (stronger than expected) third quarter GDP numbers they are going to hike in December, and the odds of a hike in January are rising, but they could still take a pause in January if core inflation doesn't heat up, |
It's pretty clear after (stronger than expected) third quarter GDP numbers they are going to hike in December, and the odds of a hike in January are rising, but they could still take a pause in January if core inflation doesn't heat up. |