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CANADA: TD Securities Now Look For Six Consecutive 25bp Cuts

CANADA
Bank of CanadaGlobalCentral Bank NewsCanadaBulletMarketsFixed Income BulletsForeign Exchange BulletsRegionNorth America
  • TD Securities have extended and slightly sped up their forecast for the BoC’s cutting cycle, seeing a terminal rate of 2.75% in June vs their previous call of 3.0% in July.
  • “We now look for 25bp rate cuts at each of the next six BoC announcements, bringing the overnight rate to 2.75% by next June.”
  • “The slack in the economy is sufficient to justify a move slightly below r* from the BoC. We are assuming a 3.00% neutral rate, while the Bank is incorporating a 2.75% neutral rate in its forecasts.”
  • “Activity data since the September 4th announcement do not justify a quicker pace of rate cuts. We cannot predict the Bank's tolerance for deviations from its July 2024 forecast for Q3, but following the July GDP data we are actually slightly more optimistic on third quarter growth, as the August flash estimate ought to incorporate one-off impacts from rail strikes.”
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  • TD Securities have extended and slightly sped up their forecast for the BoC’s cutting cycle, seeing a terminal rate of 2.75% in June vs their previous call of 3.0% in July.
  • “We now look for 25bp rate cuts at each of the next six BoC announcements, bringing the overnight rate to 2.75% by next June.”
  • “The slack in the economy is sufficient to justify a move slightly below r* from the BoC. We are assuming a 3.00% neutral rate, while the Bank is incorporating a 2.75% neutral rate in its forecasts.”
  • “Activity data since the September 4th announcement do not justify a quicker pace of rate cuts. We cannot predict the Bank's tolerance for deviations from its July 2024 forecast for Q3, but following the July GDP data we are actually slightly more optimistic on third quarter growth, as the August flash estimate ought to incorporate one-off impacts from rail strikes.”