(November 5 – 10:30 ET) – Will
the Bank of Canada raise interest
rates? Will it be influenced by the
U.S. Federal Reserve Board? These
are the questions Canadian
economists are asking themselves
today in light of this morning
positive jobs report from Stats
Canada.
“The red-hot economy and the
distinct tightening in the labour
market suggest that a domestic
rate hike is only a matter of
time, with or without a move by the
Fed,” says Nesbitt Burns.
Over at CIBC World Markets
they’re asking: “Will the Bank of
Canada rush to tighten on it’s
own? Unlikely. If the Fed judges
the U.S. economy as headed for a
slowdown and opts to leave rates
unchanged, that same slowdown will
take the steam out of Canadian
manufacturing.” CIBC also argues
that the currency effect of a
neutral Fed would put the brakes
on Canada too.
But, CIBC predicts both the Fed
and the Bank will hike by 25 basis
points this month, following hikes
in Europe and Australia.
CIBC says that while the report
was obviously positive for the
loonie, it should also bolster
domestic demand, and is therefore
supportive for stocks too.
-IE Staff
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