📝BoC Likely to Stay Hawkish Into September: TD Securities

A June rebound in hiring keeps Canada's job market resilience intact. The rise in the unemployment rate over the past two months is coming against a backdrop of job gains, and full-time positions no less, but the labour force growth has been even stronger. Month-to-month swings in job gains are volatile in Canada, but looking at three and six-month trends in hiring, job gains have slowed, in line with our forecast for the unemployment rate to rise towards 6% by the end of this year.

This is the last key piece of data before the Bank of Canada's interest rate decision next Wednesday. We expect the only modest cooling in inflation in wages will tip the Bank in favour of another 25 basis point hike. However, if they opt to skip a meeting, their tone is likely to remain hawkish, and a September hike would remain on the table.- TD Securities