Canada: BoC’s FSR and employment in focus this week – RBC CM

The analysis team at RBC Capital Markets suggest that the BoC’s semi-annual Financial System Review is due on Thu and May employment on Fri which will be the key economic releases for Canada this week.

Key Quotes

“The focus of the FSR is expected to remain on housing and household debt, especially with the BoC commenting that macroprudential measures had “yet to have a substantial cooling effect on housing markets” in their latest rate statement. Alternative mortgage lending may also be in the spotlight given recent developments in the sector. If questioned on the subject, the BoC will reiterate its view that monetary policy is too blunt and far-reaching a tool for the job of cooling housing and that macroprudential measures are best suited.”

“RBC is forecasting no change to May employment following +3.2K in April, with the u-rate ticking up to 6.6% on a partial reversal of the 46K drop in the labour force in April. Wages will be closely watched as average hourly earnings were up just 0.5% in April.”