Author: Kevin Carmichael

Listen up: BofC deputy governor has an important, if arcane, topic on her mind as retirement looms

Kevin Carmichael

Bank of Canada deputy governor Lynn Patterson is leaving the institution in a blaze of glory, at least by the standard she set for herself during six years of public service. Patterson, the former Bay Street executive who joined the central bank in 2013 as an advisor before ascending to the Governing Council the following year, announced in May that she planned to retire. Her last day is July 19. The former head of Bank of America Merrill Lynch’s Canadian operations joined the Bank of Canada when the institution was…

There are good reasons for Trudeau to lobby for Mark Carney to take over as head of the IMF

Kevin Carmichael

All this chatter about Mark Carney, son of Fort Smith, NWT., replacing Christine Lagarde as head of the International Monetary Fund and ending Europe’s reign atop that institution reminded me of some diplomatic trivia. The first managing director of the IMF was very nearly a Canadian. By the spring of 1946, Camille Gutt, a Belgian, had emerged as a strong candidate to get the new institution up and running. But the Americans wanted someone else. Canada’s negotiators at the conference that created the IMF and the World Bank had impressed…

Bank of Canada puts rate firmly on hold as global trade war damage rises

Kevin Carmichael

The Bank of Canada might not be such an outlier after all. Governor Stephen Poloz and his deputies left the benchmark interest rate unchanged on July 10. They also looked past a recent run of strong data and issued a mostly dour assessment of the economy’s near-term prospects. Unlike central bankers in the United States and other places, Canada’s policy makers didn’t foreshadow lower borrowing costs later this year. But their tone suggests a cut is more likely than an increase. The Bank of Canada cut its forecast for economic…

Why StatCan’s jobs report was good despite the headline numbers

Kevin Carmichael

Canada’s Trade Commissioner Service offered via Twitter this week to help executives struggling with this question: What is a free trade agreement? In that spirit, let’s revisit the subject of how one should interpret Statistics Canada’s monthly Labour Force Survey. The lesson is mostly for currency traders, who made some weird bets after StatCan on Friday reported that employment declined by 2,200 positions in June and the jobless rate increased to 5.5 per cent. The Canadian dollar dropped about half a cent after the data were released, which probably had…

Why Canada won’t necessarily follow any U.S. rate cuts: Kevin Carmichael

Kevin Carmichael

A lot of people assume the Bank of Canada will tag along if and when the U.S. Federal Reserve goes in a new direction. “There is a 90 per cent correlation between U.S. and Canadian monetary policy, so of course the Bank of Canada will follow,” David Rosenberg, the ubiquitous chief economist at Gluskin Sheff + Associates Inc., a Toronto-based investment firm, told BNNBloomberg earlier this month when asked if a Fed interest-rate cut would be matched by the Bank of Canada. But the relationship isn’t as automatic as Rosenberg’s…