Canada: key events next week include central bank meeting - NBF

Next week economic events from Canada include the central bank meeting. Analysts from National Bank Financial believe the Bank of Canada will stay put in March, reiterating that continued monetary policy accommodation is still needed.

Key Quotes:

“The highlight of the week will be the central bank’s monetary policy meeting. Since January, looser fiscal policy south of the border have strengthened the economic outlook. On the international front, the global economic expansion remains on track. Domestically, the average measure of core inflation has been trending up since last fall, from 1.5% in September to 1.8% in January. However, both the Canadian dollar and oil prices (Western Canada Select) are weaker than at the January rate announcement. What’s more, the country’s economic surprise index has dropped lately while NAFTA negotiations remain a source of uncertainty. All things considered, we believe the Bank will stay put in March, reiterating that continued monetary policy accommodation is still needed to keep the economy operating close to potential and inflation on target.”

“February’s labour force survey will also attract a lot of attention. After the wild gyrations experienced in recent months, we expect the pace of job creation to revert to a less volatile path. Our call is for a 20K increase in employment in February, a figure that assumes a rebound in part-time employment after a miserable month (-125K in January). If that scenario unfolds, the unemployment rate should be left unchanged at 5.9%.”

“In other news, housing starts may have advanced to an annualized 225K in February, in line with the rise observed in building permit issuance at the end of 2017. We’ll also get data on January’s merchandise trade balance. Both energy and non-energy exports may have expanded in light of rising prices. As a result, the trade deficit could have narrowed for the first time in three months, perhaps shrinking to C$2.50 billion. Fourth quarter data on labour productivity will also be released.”