Although the Canadian (and U.S.) job and employment numbers announced on Friday July 6th were positive, the trends in each country are contrasting. The Canadian job numbers have not done well in comparison to strong U.S. employment. These differences will create contrasts in our interest rate and economic policies. As our partners at National Bank Financial Economics (NBFE) team states, “Total employment registered its worst start of the year in the current expansion due to the 48K drop in private-sector jobs. Major cities were not immune to the slump. Vancouver is down 45K jobs this year and Toronto has seen a pullback of 24K.”
What to look for in this week’s Bank of Canada meeting?
In Canada, the highlight of the week will be the central bank’s report. “With its three core inflation measures close to two percent, it could be said that the Bank has a green light to proceed with further policy normalization. However, the deterioration of the international trade outlook since the central bank’s last meeting ought to give pause to the BoC.” What direction will interest rates take in Canada?
NBFE surmises that “with the U.S. threatening to instigate a trade war with China, and with NAFTA negotiations stalling, we don’t see conditions as supportive of further monetary policy normalization.”
For a detailed report on this week’s economic outlook here.