- Nomura
Canada's building permits dropped more than expected in January, driven by lower construction intentions for multi-family dwellings. The value of Canadian building permits granted in January plunged 9.8% from December, the second steep decline in three months, according to Statistics Canada. The retreat exceeded the 2.5% decrease expected by analysts. Moreover, Statscan also revised December's gain down to 7.7% from an initial 11.3%, as well as November's decline to 12.1% from 19.9%. Construction intentions for multi-family dwellings, which plummeted 21.0%, were the main reason for weaker performance in January.
The Bank of Canada may not be done with lowering its benchmark interest rate just yet. Some economists believe that the central bank will lower borrowing costs at some point in 2016, while others expect the BoC to remain on the side-lines. Although bond markets are pricing out the chances of more monetary stimulus, the difference in forecasters' views highlights a number of uncertainties in the country's economic story. The Canadian Dollar has depreciated dramatically over the past two years, but it's unclear if the decline is sufficient to underpin manufacturing.
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