Market Wire, North America

The Bank of Canada cut its benchmark interest rate by an outsized 50 basis points this morning, broadly matching market expectations and triggering a small drop in the loonie. In the official statement setting out the decision, policymakers acknowledged a broad-based slowdown in Canada, noting that consumption is declining on a per-capita basis, the labour market is “soft”, and the “economy continues to be in excess supply”. Near-term growth expectations were revised down. Updated projections in the accompanying Monetary Policy Report showed the Bank’s economists expect growth to end 2024 at 1.8 percent – down from the previous 2-percent estimate....

Canadian headline inflation decelerated by more than expected last month, lowering the hurdle to an outsized rate cut at next week’s Bank of Canada meeting. Data released by Statistics Canada this morning showed the Consumer Price Index decelerating to 1.6 percent on a year-over-year basis in September, down from the 2-percent increase recorded in August and well below consensus expectations that had been set closer to 1.8 percent. On a month-over-month basis, prices fell -0.4 percent. Excluding shelter costs, prices rose just 0.4 percent relative to a year prior. Underlying pressures remained sticky: core inflation, computed as the average of...