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Macquarie Economist Previews This Week's Bank of Canada Policy Meeting

The Bank of Canada is scheduled to release its policy statement at 9:45 a.m. ET on Wednesday.Macquarie's base case is for a hold with the Overnight rate likely to remain at 2.25%, said its head of economics, David Doyle.Forward guidance should remain "ambiguous" given the elevated uncertainty, stated Doyle.There may be some increased concern on the inflation front due to the recent oil price spike, he noted. Despite this, the underlying consumer price index figures so far in 2026 have shown a moderation, suggesting that a signal of a near-term rate hike is unlikely.While the BoC is likely to stop short of signaling one at this meeting, Macquarie continues to see the next policy move as a hike.In Doyle's view, this should only come later this year in the context of labor market improvement and above target inflation.

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Treasury102d ago

Commerzbank on Overnight News

Commerzbank in its "European Sunrise" note of Tuesday highlighted:Markets: United States Treasuries and German Bunds stay on the back foot. Japanese government bond curve flattens from both sides after the Bank of Japan rate decision, with odds for June hike lifted above 70%. S&P closes at a new record and e-minis stay supported, Nikkei falls. Brent rises above US$109/barrel. The euro (EUR) weakens, yen (JPY) rallies.Iran war: President Donald Trump is reviewing the Iran proposal and will address the matter "very soon," says White House spokeswoman. NYT reports Trump is "dissatisfied" with the proposal, WSJ says he is "wary." Secretary of State Marco Rubio says Iran's offer is better than expected, but questioned whether the person who submitted it had the authority to do so. Rubio also said Iran wants control of the Strait of Hormuz, which is unacceptable.U.S.: International carmakers threaten to pull cheapest models from the U.S. without a trade deal (WSJ).==EUROPE:Germany: The finance ministry is preparing several options to deal with budget widening, including debt brake exemption on the emergency clause (Bloomberg).U.K.: British BRC shop prices fell to 1% year over year in April from 1.2%, consensus was looking for an increase to 1.4%.==ASIA:Japan: The BoJ keeps rates on hold in a 6-3 vote, core inflation forecast for this year was raised to 2.8%.

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Treasury102d ago

Inflation Still Bites in Canada Despite Levels Close to Target, Says BMO

Ahead of Tuesday's fiscal update by the federal government and Wednesday's Bank of Canada decision, Canadians aren't feeling a whole lot better about inflation, said Bank of Montreal (BMO).That's despite most headline and core rates settling around 2%, noted the bank.Price levels matter, and high levels for gasoline, groceries and rent continue to impact household psychology, stated BMO. While other categories, such as child care, telecom and some consumer goods, have seen prices well contained, that only helps if you don't need to eat, get to work and live somewhere.April's gasoline tax cut will show up in next month's consumer price index reading, after the conflict-driven spike, pointed out the bank. Gasoline prices can quickly influence inflation expectations because most people see them every day.Canada's central bank knows this, added BMO.Food prices have been better behaved, but the level of prices at the grocery store is still about 35% higher than pre-COVID, according to the bank. Cooler inflation doesn't mean a cheaper grocery bag.There is a risk that higher input costs put a floor under food inflation in the year ahead.

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Treasury102d ago

US Treasury Yields Rise Pre-Bell as Investors Await ADP Jobs, Home Prices Amid Worsening Iran Geopolitics

Treasury102d ago

US 10-Year Treasury Yield Rises 1.8 Basis Point to 4.35% Pre-Bell; 2-Year Rate Gains 1.5 Basis Points to 3.82%

Treasury102d ago

SocGen's Overnight Economic News Summary

Societe Generale in its early Tuesday economic news ummary pointed out:-- Brent rallies to US$111/barrel, President Trump unlikely to accept Iran's proposal to end Iran conflict after meeting with national security officials. Ongoing negotiations centered around a staged process: the first part of a potential deal would focus on returning to the status quo and reopening the Strait of Hormuz without restrictions or tolls.-- Bank of Japan on hold at 0.75%, hawkish dissent. Nakagawa, Takata and Tamura voted for a 25bps rate hike. The consumer price index forecast raised to 2.8% from 1.9% for FY26 and 2.3% from 2.0% for FY27, core 2.6% for both years from 2.2% (FY26) and 2.6% (FY27). The gross domestic product forecast lowered to 0.5% from 1.0% for FY26. Assumption oil prices drop to US$70-US$80/barrel at the end of the projection period.-- Day ahead: United States consumer confidence, seven-year U.S. Treasury auction. European Central Bank CPI expectations. Hungary's and Chile's central banks forecast to stay on hold.-- Nikkei -1.0%, EUR 10-year IRS +2bps at 3.085%, Brent crude +2.1% at US$110.4/barrel, Gold -1.1% at US$4,625/oz.

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Treasury102d ago

US Treasury Closing Levels

3:00 Monday vs 3:00 Friday2yr 100-04 vs 100-05; 3.799% vs 3.744%5yr 99-21+ vs 99-25+; 3.947% vs 3.918%10yr 98-10+ vs 98-17; 4.335% vs 4.308%30yr 96-31+ vs 97-14; 4.941% vs 4.914%2/10 53.307 bps vs 53.245 bps5/30 99.249 bps vs 99.402 bps

Treasury102d ago

US 5-Year Auction High Yield Falls From Previous Month, Demand Higher

The US Treasury's 5-year auction hit a high yield of 3.955% on Monday, down from the 3.980% high in the previous auction.The bid to cover ratio for the auction was 2.33, above the 2.29 ratio in the previous auction.Dealers represented 55.38% of the bids, with direct bidders at 7.89% and indirect bidders at 36.74%.For takedown, dealers took 12.68%, with direct bidders at 15.03% and indirect bidders at 72.29%.

Treasury102d ago

US 5-Year High Yield 3.955% vs 3.980% Previous; Bid/Cover 2.33 vs 2.29 Previous

Treasury103d ago

US 2-Year Auction High Yield Falls From Previous Month, Demand Higher

The US Treasury's 2-year auction hit a high yield of 3.812% on Monday, down from the 3.936% high in the previous auction.The bid to cover ratio for the auction was 2.65, above the 2.44 ratio in the previous auction.Dealers represented 55.64% of the bids, with direct bidders at 14.53% and indirect bidders at 29.83%.For takedown, dealers took 11.87%, with direct bidders at 31.65% and indirect bidders at 56.48%.

Treasury103d ago

US 2-Year High Yield 3.812% vs 3.936% Previous; Bid/Cover 2.65 vs 2.44 Previous

Treasury103d ago

Scotiabank Previews This Week's February and Preliminary March GDP for Canada

Canada reports gross domestic product for February and the preliminary estimate for March on Thursday, said Scotiabank.February was initially guided by Statistics Canada to have been tracking a 0.2% month-over-month gain last month. Updated estimates are still in the same ballpark, but investors also get important details on sector drivers, noted the bank.More meaningful may be the flash guidance, with no details, for March GDP, for which there is very little information so far, but a small gain is "feasible," stated Scotiabank.The outcome will further inform Q1 GDP growth tracking on a production/income basis using monthly GDP. It's feasible that growth is tracking close to the Bank of Canada's 1.8% January Monetary Policy Report estimate, but that's on an expenditure basis. The massive over 4% inventory drag on Q4 GDP could reverse as an added upside, pointed out the bank.One key is that consumer spending on goods is tracking a strong rebound in Q1 based on retail sales volumes. It's untrue that the economy isn't exhibiting rate sensitivity, a view that is disproportionately driven by a false understanding of what's keeping condo markets weak in Toronto and Vancouver, added Scotiabank.

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Treasury103d ago

Canada's Q1 Retail Sales Strong But Tame Inflation to Keep the BoC From Hiking Rates, Rosenberg Says

Canadian retail sales rang in "solidly" but softer than expected in February, growing 0.7% month over month against a forecast of 0.9%, said Rosenberg Research after Friday's data.The "crucial" excluding auto sector also grew less than expected at 0.5% month over month versus 0.8% forecast, noted Rosenberg.Despite the below-forecasted print, these are still solid numbers, with Canadian retail sales showing clear strength overall, stated Rosenberg. The problem is that this is "stale" data, as it precedes the Iran conflict and the subsequent shock to gasoline prices.It's reasonable to expect much lower growth over the next few months, it pointed out.That said, the flash estimate for March came in at a "solid" 0.6% month-over-month growth, meaning that the first quarter as a whole is on pace for an increase of 8.5% on an annualized basis. That would be the fastest pace since Q4 2024 and is a strong build-in for the retail component ahead of Canada's monthly gross domestic product release on Thursday, added Rosenberg.Rosenberg is slightly skeptical that the March number will be quite that strong, given the gasoline price shock, but Q1 retail sales overall were clearly "solid."If, as Rosenberg expects, the Canadian economy is headed for an energy-shock-related speedbump in the spring, there's nothing that would suggest the Bank of Canada needs to hike at all. Pre-war inflation trendlines were all fine, and the most rate-sensitive sectors of the economy are "far from healthy."

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Treasury103d ago

Scotiabank Previews This Week's Bank of Canada Policy Meeting

The Bank of Canada will deliver its latest policy statement, a fresh Monetary Policy Report (MPR) including updated projections, and Governor Tiff Macklem's written opening remarks to his press conference at 9:45 a.m ET on Wednesday, said Scotiabank.This will be followed by the press conference led by Macklem and Senior Deputy Governor Carolyn Rogers, starting at 10:30 a.m. ET on Wednesday and lasting for typically over 45 minutes, noted the bank.Scotiabank estimates the overnight rate to be left at 2.25%. This is priced in OIS and the consensus is unanimously supportive of a policy hold.No changes to balance sheet policies are expected, added the bank.It's expected that there will be stronger warnings on the implications of an inflation shock to the policy rate's path, but with no commitment, according to Scotiabank. No explicit guidance is likely, but the policy rate bias is likely to sound like it leans in a more hawkish sounding direction.

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Treasury103d ago

Canada's Federal Government Announces First National Sovereign Wealth Fund

Canada's Prime Minister Mark Carney announced the nation's first national sovereign wealth fund, the 'Canada Strong Fund', at a press conference in Ottawa on Monday.The Liberal Party's majority federal government will endow $25 billion into the fund, one Carney says will function as a "national savings and investment account designed to grow wealth for future generations of Canadians." In remarks made during the announcement Carney noted Canada's economic relationship with the administration in the United States had changed, and "that's their right", and his government is responding to that in finding new ways of growing the domestic economy here without relying on its ties with its North American neighbour. "That is our imperative."

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Treasury103d ago

Canada PM Mark Carney Says 'Canada Strong Fund' Will Start With Initial Endowment of $25 Billion

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Treasury103d ago

RBC Previews This Week's Bank of Canada Policy Meeting

Focus this week will be on the Bank of Canada's decision on interest rates Wednesday amid rising consumer prices, and then on February's gross domestic product print on Thursday, said RBC in its Forward Guidance note published last Friday.RBC expects the BoC to hold interest rates unchanged for a fourth consecutive meeting, but said policymakers will be watching the impact of higher energy prices on inflation closely. Headline consumer price index growth looks likely to rise above the 1% to 3% inflation target range in April for the first time since December 2023, it added.But there is nothing the BoC's interest rate policy can do to influence the global price of oil, and lags in the impact of interest rates on the economy mean the central bank needs to set monetary policy based on where inflation will be in the future, not just where it is today, RBC noted.RBC estimates the BoC will be cautious about adding to near-term affordability challenges created by a supply-driven surge in fuel costs as long as inflation expectations and broader inflation pressures, outside of energy price increases, remain contained.Inflation expectations did edge higher in the BoC's Business Outlook Survey (BOC) last week, but further signs of easing in "core" measures in March should leave the central bank flexibility to focus on incoming data against its recent projections, according to RBC.Q1 GDP growth is tracking "broadly in line" with the BoC's January forecast, with recent data pointing to a modest pickup in momentum following a softer start to the year. Labor market conditions have also shown signs of stabilization, but with the unemployment rate still at levels that wouldn't imply underlying inflation pressures building, RBC said.This combination suggests limited urgency for further policy adjustment in the near term, it added, noting the bank's base case forecast assumes rates remain on hold through 2026 with gradual increases beginning in 2027 as the economy continues to normalize.

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Treasury103d ago

Canada PM Mark Carney Says the U.S. Has Changed, "That's Their Right"; And "We Are Responding. That Is Our Imperative"

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Treasury103d ago

Canada PM Mark Carney Announcing New Public Investment Fund To Finance Major Projects

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Treasury103d ago

Canada to Announce Creation of A Sovereign Wealth Fund This Morning, says Scotiabank

The Canadian federal government, led by Prime Minister Mark Carney, will announce a new sovereign wealth fund in a press conference at 9:15 a.m. ET on Monday in Ottawa, while Finance Minister Francois-Philippe Champagne will follow that up with a press conference at 10 a.m. ET in Montreal, says Scotiabank in its Monday morning note.The announcements around the fund will come ahead of Tuesday's Spring economic update from the federal government and, further down the road, ahead of a September investment conference that the Carney administration is planning, aimed at attracting global investment to Canada, notes Scotiabank."The devil will be very much in the details", says the bank of the new fund.One immediate observation from Scotiabank is that usually countries with sovereign wealth funds are net savers. Canada isn't.

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Treasury103d ago

RBC Previews This Week's Bank of Canada Policy Meeting

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