RBC economist Claire Fan expects the Bank of Canada to lower its key interest rate again at its Oct. 29 meeting.
“Unless there is a drastic turnaround in softening employment trends and easing core inflation in September, we think the likelihood for another cut in the October meeting is high,” she said.
Early signs of improvement in trade, manufacturing and wholesale sales point to growth, suggesting another quarterly decline in GDP is unlikely.
But, export and labour market data will rank high on the list of critical indicators for BoC, she says.
“Most Canadian exports have to-date remained free from U.S. duties, but close industrial integration means that a slower U.S. economy would put non-tariffed exports at risk as well, broadening and exacerbating the challenges already faced by Canadian producers and manufacturers that could warrant additional easing from the Bank of Canada.
