Canada BoC Rate Cut: The Bank of Canada has cut the overnight rate by 0.50% to 3.75%.

Canada BoC Rate Cut: The Bank of Canada has cut the overnight rate by 0.50% to 3.75%. The Bank Rate is at 4.00%, and the deposit rate is 3.75%

• Balance Sheet Normalization: The Bank is continuing its policy of balance sheet normalization.• GDP Growth Forecast: The Canadian economy grew around 2.00% in the first half of the year, and growth is forecast at 1.75% in the second half.
• Labour Market: The unemployment rate was 6.50% in September. While the growth in population keeps on increasing, so is the labor force. Still, hiring is modest, especially among the youth and new immigrants.
• Residential Investment: Growth in residential investment is likely to go up based on the recognition of solid housing demand and improving sales and renovation outlays.
• Wage and Productivity: Increase in wage remains much higher compared to increases in productivity.

• **Inflation:** CPI was at 2.70% in June and fell to 1.60% in September. Core inflation measures now lie below 2.50%.
• **Future Rate Cuts:** Further reductions in rates are likely if the economy develops in line with expectations. Timing and tempo to be data and inflation dependent.

Global Outlook

• **Global Growth Forecast:** The global economy is expected to grow at around 3.00% over the next two years.
• US Economy: Growth in the US economy is bound to set in stronger than previously anticipated.
• China’s Outlook: In the case of China, economic growth continues to be subdued.
• Euro Area: Growth has been soft but should recover modestly next year.
• Inflation Trends: Inflation in advanced economies has fallen and is now closer to central bank targets.
• Global Financial Conditions: Financial conditions have eased since July, partly due to market expectations of lower policy interest rates.
• Oil Prices: World prices for oil are about US$10 lower than assumed in the July MPR, pushing gasoline prices and inflationary pressure lower.