The BIG Picture

It has been an eventful few weeks. The Bank of Canada cut interest rates for the second consecutive time. Meanwhile, global equities have been weaker, driven by a sector rotation rather than broad market weakness.

After a first interest rate cut in June, the Bank of Canada (BoC) again lowered its key overnight rate by 25 basis points at its meeting Wednesday, to 4.5%. The move was in line with market and our own expectations ahead of the announcement.

The latest Business Outlook Survey largely confirmed further normalizing in a few key areas that the central bank has deemed critical to future inflation trends.

The summer has gotten off to a reasonable start with global equities moving higher in recent weeks.

Global equities have been somewhat directionless over the past few weeks. One notable development was the Canadian inflation report for May, which was higher than expected for the first time this year.

Canadian and European equities have been weaker in recent weeks, though year-to-date gains remain respectable. Meanwhile the U.S. equity market continues to display strength, driven by the large cap technology sector.

Evidence has continued to build that the current high level of interest rates is no longer needed. All ducks appear to be in a row for the Bank of Canada (BoC) to kick-start the policy easing cycle and lower the overnight rate by 25 basis points to 4...

Over the past week, Canadian banks reported their second-quarter results. Much of the focus has understandably been on the outsized stock price reactions. Typically, any moves in the Canadian bank stocks related to earnings results are relatively tame...

May has been a noticeably better month for markets.  A weaker pace of job growth and inflation numbers have rekindled hopes that the U.S. Federal Reserve may start cutting interest rates in the second half of the year.