CANADA: Debate Week Underway Ahead Of 28 Apr Election
PM Mark Carney's centre-left Liberal party remains in a strong position to win an outright majority in the House of Commons according to the latest opinion polling and political betting markets. Only a single poll over the past week, from Mainstreet Research on 13 April, has shown the centre-right Conservatives leading. Even then, if the 44-42% split in the Conservatives' favour was repeated in a federal election, it would likely not prove sufficient for Pierre Poilievre's party to win an overall majority given the Canadian first-past-the-post electoral system.
- The next few days could prove an important milestone in the election campaign, with the French and English-language leaders' debates taking place.
- This first debate will be conducted in French and starts at 2000ET. PM and centre-left Liberal party leader Mark Carney, centre-right Conservative party leader Pierre Poilievre, as well as Yves-Francois Blanchet from the regionalist Bloc Quebecois, Jagmeet Singh from the left-wing New Democratic Party, and Jonathan Pedneault from the environmentalist Greens will participate.
- The second leaders’ debate takes place in Montreal, this time conducted in English. The debate will have the same five individuals as participated in the French-language debate. The event starts at 1900ET.
Chart 1. Federal Election Opinion Polling, % and 8-Poll Moving Average
Source: Liaison Strategies, Mainstreet Research, Nanos Research, Abacus Data, Innovative Research, Angus Reid, Pollara, MQO Research, Leger, Research Co., Ekos, Ipsos, Pallas Data, MNI
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
