Harvest Global Markets :

The latest release from Statistics Canada asserts that in October, the Canadian economy created 108,000 new jobs, largely reversing the declines seen in prior months. After four months of job losses or slow employment growth, there has been an increase in employment. Jobs have increased across a wide variety of industries, with manufacturing, construction, and lodging and food services taking the lead. Additionally, it runs counter to rumbling concerns that a future recession in the Canadian economy due to rising interest rates is on the horizon.

Canada’s Finance Minister released a Fall Economic Statement on Thursday, committing billions as an additional disbursement to help low-income employees and encourage sustainable energy technology, among other initiatives, and using a tax windfall to help those businesses most impacted by rapidly rising costs.The Canadian Economy has observed a big windfall inrevenues coming from higher inflation and a stronger economy and a tighter labor market. The federal government’s fall economic update makes it clear that while the deficit is declining, the risk that Canada enters into a recession is rising.

The Bank of Canada also released its latest monetary policy report last week, which suggested the Canadian economy is headed for a significant slowdown toward the end of the year and into the first half of 2023.The inflation has trimmed from 8.1 % to 6.9%in three months ending September and the Bank of Canada is lagging behind Fed rate hikes. The domestic economy is shrinking as the Canadian Dollar is losing its sensitivity to oil, amidst the political and economic uncertainty in the global crude market. Secondly, China is considered the third most valuable trade partner for Canada, and persistent lockdowns in China’s industrial hub have also negatively impacted Canada’s economic sustainability.

manufacturing is only a small part of the economy, meaning that the inflation fight will remain a long slog. The contraction in the economy is not showing any signs of softening labor market as expected.

In the medium term, considering the current economic scenario in the US investors anticipate a consistent hawkish by the FED implying a global strain for other major part of the world.