Canadian bank leaders see struggles for the Canadian economy

RBC execs:

• Expect Canadian economy to continue softening in 2025 with GDP and population growth slowing
• Credit losses to be in the mid 30s and peaking in the second half of the year
• Canadian economy has been underperforming, expects BOC to continue cutting rates more aggressively than the Fed
• Backdrop in the US has been far more resilient
• Potential of expansive US fiscal policy could create uncertainty around the size and timing of monetary policy actions

National Bank execs:

• Canadian economy to experience slower growth in H1 as interest rates remain restrictive
• Economy will face uncertainties related to path of mon pol and divergence between the BOC and Fed
• Challenging credit environment expected to temper net income growth for financial markets segment

With the ECB essentially teeing up a 25 bps cut and the Fed leaning towards 25 bps, the Bank of Canada is shaping up to be the toughest central bank decision to handicap. The market is pricing a 53% chance of 50 bps and a 47% chance of 25 bps for the Dec 11 meeting.

Based on these comments, they would be wise to go big but that will further weigh on the Canadian dollar.

This article was written by Adam Button at www.forexlive.com.