Bank of Canada to raise interest rates this week, all 6 big banks say

financialpost.com:

All six of Canada’s main commercial lenders now expect the Bank of Canada to raise interest rates this week after the country’s labour market tripled expectations in June.

The country added 60,000 jobs, driven by gains in full-time work, while the unemployment rate rose to 5.4 per cent, the highest since February 2022, Statistics Canada reported Friday in Ottawa. The figures blew past a 20,000 forecast gain, but missed expectations in a Bloomberg survey for a jobless rate of 5.3 per cent.

Friday’s data show the loss of 17,300 positions in May was a temporary setback, although the increases last month were accompanied by slower wage gains of 3.9 per cent — the weakest in a year. With the economy still churning out jobs despite 450 basis points of rate hikes, the central bank is likely to remain on its tightening path after ending its conditional pause on June 7 and raising the benchmark overnight rate to 4.75 per cent.

After the release, Canadian Imperial Bank of Commerce joined its peers in forecasting a rate hike from the central bank at its July 12 meeting.

“The data are probably just strong enough to see policymakers pull the trigger on another 25 basis-point interest rate hike next week, rather than wait until September as we had previously forecast,” CIBC economist Andrew Grantham said in a report to investors.

“We still think that the rate of 5.0 per cent reached at the time of the next hike will prove to be the peak, as evidence that the economy is slowing appears to be mounting,” he added.

The loonie rose as high as $1.3288 per U.S. dollar after the jobs report, which came at the same time as Bureau of Labor Statistics figures that showed U.S. employers added fewer jobs in June than expected.

Canada’s