What Happened Last Week?
Canada’s TSX was the only major North American index to gain ground last week. Its rise of .5% may be modest compared to some week’s gains and losses, but it outpaced its continental rivals, and all other indicators in our grid, above.
On Tuesday StatsCan released consumer inflation numbers that showed prices have risen 4.3% in the March-to-March timeframe. One month earlier the year-over-year inflation rate was 5.2%. Much of the decline in this March’s annualized inflation rate can be attributed to the steep monthly price increases experienced in March 2022, which were 1.4%. In March 2023 consumer prices rose 0.5%. Last month food prices rose 8.9%, shelter increased by 5.4%, health and personal care rose 6.5%, while gasoline fell by 13.8%. StatsCan’s CPI release
On Thursday Tiff Macklem and Carolyn Rogers, Bank of Canada Governor, and Senior Deputy Governor, respectively, testified in Ottawa. The central bankers indicated that rate cuts are not expected in 2023, and a slowdown, not a recession, is expected in Canada. Some concern was expressed that further increases to government spending could contribute to inflation as the public service strike continues, and 150,000 federal workers seek higher wages. The robust job market could continue to fuel inflation, which could also delay interest rate cuts or lead to rate increases. The Bank of Canada’s overall view is that inflation will come under control and the economy will experience a soft landing. Several months will need to pass before we know whether this prediction has become reality. CBC’s take on BoC testimony
What is Ahead for this Week and Beyond?
In Canada, February’s Gross Domestic Product data, and March’s new housing price index, wholesale sales, and manufacturing sales are scheduled for release. Also, the Bank of Canada will release its summary of deliberations from the last interest rate decision.
In the U.S., the house price index, new home sales, mortgage market index and pending home sales will provide insight to the housing market for March. Consumer confidence, durable goods orders, along with Q1 Gross Domestic Product and Personal Consumption Expenditure (PCE) price index, the Federal Reserve’s preferred inflation measure, will also be reported.
Globally, Japan will release a number of economic indicators including its Consumer Price Index, industrial production, retail sales and unemployment. In the Eurozone, German and French consumer confidence and spending, consumer inflation and Gross Domestic Product numbers will be released.