📝Holding BoC Hold Call With Low Conviction: RBC

We look for the economy to recover in Q3 as trade balance improves, and gross domestic product growth to

become positive after contracting from weak net trade and business investment. Consumer spending trends

held up in July, according to our own tracking of card spending data.

Our labour market outlook is unchanged despite softer data over July and August. We still look for limited

additional job losses to stay mostly confined to trade-exposed sectors, and a peak unemployment rate of

7.1%, similar to right now.

We continue to expect the Bank of Canada will hold rates, but with low conviction. Upside risks to inflation

have receded but are still present, and worth patience from the central bank. Although weaker jobs and GDP

data relative to consensus (though not the BoC’s forecast) keeps possibility of rate cuts alive. - RBC