Articles & Reports

With expectations that the Bank of Canada might be taking another big step in December, enroute to a bit below neutral next year, the latest In Focus article lays out how to read the tea leaves in this easing cycle.

We’ve been giving some thought to the Taylor Rule. Not John Taylor’s monetary policy guideline, but how one assesses the economic consequences of large scale events, prompted by Taylor Swift’s swing through Toronto and Vancouver in November and December.

Global equities sold off overnight, as global yields are broadly higher. China sensitive assets such as industrial metals, Chinese equities, and AUD/USD are weaker as Michael Waltz and Marco Rubio were appointed National Security Advisor and Secretary of State, implying a tough China stance from the new administration.

Despite the combination of holidays and a sparse data calendar we head into the new week against the backdrop of moderate risk impetus. US equity futures are testing higher as bitcoin trades fresh highs beyond 82,000. Conversely, oil has retreated below the 50Day MAV, currently at US$70.62p/b, amidst expectations of additional (US) capacity coming on stream.

Global equities, commodities and yields are lower this morning amid disappointing China stimulus news. Chinese equities, industrial metals, and AUD are the underperformers as one would expect.

Economic models place considerable emphasis on the concept of “potential GDP”, defined as the level of real output that at any point in time is the maximum attainable without upward pressure on inflation.

Given large market moves seen in the past few sessions, there is some near term fatigue in the Trump trade.

Chief Economist Avery Shenfeld takesa look at the economic implications of Trump's election victory for our base case. For the macro picture, the three salient issues are tax/spending changes and their impact on budget deficits and borrowing needs, trade policy, and monetary policy (including Fed appointments).

The lead up to major events typically entails a rise in uncertainty, and the event itself then resolves that uncertainty one way or another. But for the upcoming US election, the only certainty is that there could be at least as much uncertainty the morning after we know the winner.

It seems that every market is moving off of idiosyncratic or fundamental factors this morning, with the broader macro story largely stepping aside ahead of big US risk events to come.

The good news is that Canadian monetary policy is now on a decisive easing path, one that should allow a return to full employment by 2026. Three cheers for that. But forgive us if we do a little Monday morning quarterbacking, by exploring whether, with the benefit of hindsight, all of the economic pain inflicted by high interest rates, in the battle to wrestle inflation back to 2%, was actually necessary.

The role of the private sector in supporting economic reconciliation.

Our latest In Focus article discusses the potential role of modular housing in easing the housing affordability issue in Canada.

CIBC's 2nd annual Carbon Summit was held in Toronto on October 10, 2024. The in-person day of panels and networking brought back industry experts to share insights and practical examples of how to navigate the evolving carbon markets and their nexus with the energy transition.