Economics Hub

Into the start: Risk recovering somewhat into the open. Gauges of European bank stocks are also in the green.

Canadian budget secrecy ain’t what it used to be, back in the days when mum was the word about what it will contain.

Bipan Rai and Benjamin Tal, Deputy Chief Economist at CIBC Capital Markets, discuss the current state of affairs in the banking system and what it means for Fed and Bank of Canada policy.

Into the start: Anxious start to the week. UBS shares were down by as much as 16% at one point, but have since bounced aggressively.

When central banks raise rates, there’s bound to be trouble. But when inflation is elevated, as it has been, you could say that the central bankers are out looking for trouble, as that’s what it takes to slow the economy and cool those price pressures.

Into the start: CS shares rise by record levels in pre-market trading after an announcement last night that it had tapped SNB liquidity.

Into the start: We made it through a day without a bank failing. Importantly, no major signs of deposit outflows were reported yesterday.

Following two years of uncertainty, and a global pandemic, we forged on, prepared to tackle what lay ahead.

The extreme volatility this week warrants some serious discussion, and Ian is joined by Craig Bell for this episode. The duo begin discussing the rapid series of events that culminated in one of the most volatile days for interest rates since the 1980s. Craig provides his view on what this all means for monetary policy, while Ian introduces two potential shoes left to drop that suggest the coast is not entirely clear yet. The co-hosts spend some time discussing how Canadian interest rate derivatives are handing the benchmark transition towards CORRA, and finish the episode discussing their favorite trades in the weeks ahead.

As Tolstoy said about families, so it is for economies: happy ones are all alike, but unhappy economies are unhappy in their own way.

Into the start: Markets responding to weekend announcements made by the FDIC, US Treasury and Federal Reserve.

In the pristine world of textbook economics, subsidizing selected industrial activities is deemed to be an undesirable diversion from the free market’s invisible hand.

In the US: For Powell today, I suspect markets will want some form of validation and/or endorsement of the shift higher in Fed terminal over the past month.

Into the start of the week: We’re seeing some signs of weakness in commodities that’s migrating into FX.

Into the start: Risk assets trade firmer overnight, while North American stocks look poised to open higher this morning.

The word of the day for the US economy is “resilience.” That’s an apt description for an economy that has shown some surprising momentum in the first months of 2023.

A central banker’s word is their bond, at least if they want to have markets take heed the next time they try to provide guidance on what lies ahead.

Into the start: US nominal yields probing fresh highs for the year. That appears to be bleeding into other core rates markets as well.

In the US: a.) ICYMI – the WSJ reports that the US Energy dept has revised its assessment and now sees a lab leak as the most likely origin of the Covid-19 pandemic. Meanwhile, NSA Sullivan says that China still hasn’t taken a final decision on providing Russia with aid. b.) Yellen says that she expects to see a readjustment of lower housing rentals to further drive inflation lower this year.

The good and the bad of the “Prohibition on the Purchase of Residential Property by Non-Canadians Act”. Here is why we think policymakers should take another look at the Act in a way that is consistent with what it was intended to achieve — focusing only on single units being purchased by foreigners while exempting development of new supply from the impact of the new legislation.