Market Wire, North America

The Bank of Canada lifted its benchmark overnight rate to 3.75 percent this morning, disappointing Canadian dollar bulls who had expected a 75-basis point move. In the statement accompanying the decision, the central bank said “the economy continues to operate in excess demand and labour markets remain tight” but warned, “The effects of recent policy rate increases by the Bank are becoming evident in interest-sensitive areas of the economy: housing activity has retreated sharply, and spending by households and businesses is softening. Also, the slowdown in international demand is beginning to weigh on exports.” As expected, the Bank lowered growth...

Canadian inflation slowed by less than expected in September, raising the odds on a 75 basis point move at next week’s Bank of Canada meeting. Data released by Statistics Canada this morning showed consumer prices rising 6.9 percent year-over-year in September, with the month-over-month increase amounting to 0.1 percent, beating expectations for a -0.1 percent decline. Annual inflation peaked at 7.6 percent in July, and fell to 7 percent in August. Core inflation, computed as the average of the three price measures preferred by the Bank of Canada (trim, median, and common), increased an annualized 5.3 percent – roughly unchanged...