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With Canada’s Economy in Transition, the Neutral Rate is Key in 2019
by Ed Devlin, Michael Kim, Vinayak Seshasayee of PIMCO, 2/4/19

We are skeptical Canada can shift its growth model, and our investment outlook for Canada is cautious as a result.

Collapsing Oil Prices, Not Trade, Pose Biggest Exogenous Risk to Canada’s Economy
by Ed Devlin, Vinayak Seshasayee, Michael Kim of PIMCO, 10/24/18

While trade policy has dominated headlines, we believe investors should focus on the collapse of Western Canadian Select (WCS) oil prices relative to global benchmarks, which represents the biggest exogenous risk to the Canadian economy.

Canada’s ‘Rudest Awakening’ May Come From Debt‑Saddled Consumers
by Ed Devlin, Michael Kim, Vinayak Seshasayee of PIMCO, 6/27/18

External pressures are mounting, but Canada’s biggest wake-up call may come from within.

Canada’s ‘Wait and See’ Budget
by Ed Devlin of PIMCO, 3/24/17

As expected, Ottawa presented a cautious budget for 2017 that focused more on implementation than on bold new initiatives, and there is much to commend about Finance Minister Bill Morneau’s wait-and-see approach.

Canada's 2017 Economic Outlook: A Tale of Two "Tails"
by Ed Devlin of PIMCO, 1/31/17

Investors need to prepare for more extreme economic outcomes – both good and bad.

Canada’s Monetary Policy Stuck Between a Rock and a Hard Place
by Ed Devlin of PIMCO, 5/4/16
Understanding a central bank’s reaction function to volatile financial and commodity markets can help investors navigate an uncertain environment.

U.S. and Canada: Continued Recovery With Some Potential for Headwinds
by Ed Devlin, Mike Cudzil of PIMCO, 4/8/15
?Each quarter, PIMCO investment professionals from around the world gather in Newport Beach to discuss the firm’s outlook for the global economy and financial markets. In the following interview, portfolio managers Ed Devlin and Mike Cudzil discuss PIMCO’s cyclical outlook for Canada and the U.S..

With the Bank of Canada, Is the Canadian Economy in Good Hands?
by Ed Devlin of PIMCO, 2/27/15
A disorderly decline in energy prices could spill over into consumer and business sentiment, which would worsen any drop in Canada's economic output. More rate cuts this year are likely a part of the Bank of Canada's base case scenario. Investors may be able to improve their returns by buying bonds with high-quality credit spreads, including Canadian bank senior debt and Ontario bonds.

Recovery Gaining Momentum?
by Ed Devlin, Mike Cudzil, Lupin Rahman of PIMCO, 1/9/15
U.S. growth will remain robust over the cyclical horizon due to increasing consumption driven by the narrowing unemployment gap and increase in disposable incomes. The Canadian recovery should continue, though divergent forces ? including the U.S. recovery and oil price declines ? could have significant implications for the economy. Growth will be muted across Latin America, with some economies benefitting from U.S. growth, and others dragged down by the slowdown in the eurozone and China.

PIMCO Cyclical Outlook for the Americas: Recovery Remains Intact, Yet Uneven
by Ed Devlin, Mike Cudzil, Lupin Rahman of PIMCO, 10/2/14
U.S. growth can potentially exceed expectations over the cyclical horizon, in part bolstered by a healing consumer and a very accommodative Federal Reserve. While real growth in Canada has been modest in recent years, it increased to 3.1% in the second quarter and we expect that positive momentum to continue this year. In Latin America, we expect growth will pick up for the region as a whole with outperformance by smaller economies like Colombia and Panama.

U.S. Growth Offers a Tailwind for the Region
by Mohit Mittal, Ed Devlin, Lupin Rahman of PIMCO, 4/1/14
PIMCO expects growth in the U.S. to improve due to a reduction in fiscal drag, although the Federal Reserve?s tapering and slowing growth in China are risks. While higher U.S. growth should offer a boost to exporters, Canada will likely face headwinds from a housing correction and drop in consumption. Latin America has fared relatively well amid the recent volatility in emerging markets, but differentiation across credits and markets continues to increase.

All Things in Moderation, Including Housing
by Ed Devlin of PIMCO, 1/29/14
In our view, the cooling housing market and other domestic factors will keep Canadian growth at a modest 1.75%-2.25% in 2014, despite a boost from higher U.S. growth. While we expect a correction in Canadas housing market to begin this year, the macroeconomic environment and the availability of mortgage credit suggest a housing crash is unlikely. In this environment, we think the Canadian dollar should remain attractive, 10-year bonds should offer the potential for gains, and provincial bonds will likely outperform federal government and corporate bonds.

PIMCO Cyclical Outlook for the Americas: Riding the Cross-Currents of Higher U.S. Growth and the Fed
by Mohit Mittal, Lupin Rahman, Ed Devlin of PIMCO, 12/20/13
In the U.S., lower fiscal drag and the possibility of higher consumer and corporate spending should drive growth higher in 2014. Supported by higher U.S. growth and stabilization in Europe and China, Latin America is set to grow 3%-4% on average, but with a large dispersion across countries. Canada should benefit from the U.S. recovery but will likely lag U.S. growth due to lower consumption and residential investment.

PIMCO Cyclical Outlook for the Americas: A Slow-Moving Fed Benefits Economies on Both Continents
by Mohit Mittal, Lupin Rahman, Ed Devlin of PIMCO, 10/3/13
PIMCO expects the U.S. economy to grow 2.0%2.5% over the next year. However, a continued government shutdown would be a drag on growth. In Latin America, we see growth picking up to 3.0%3.5%, but the outlook varies by country. Mexico should fare well, but Brazils story is more mixed. In Canada, we believe the housing correction will be less severe than many are predicting, and we expect GDP to grow 1.5%2.0% over the cyclical horizon.

Investing In Corporate Bonds: The Compelling Case For Active Management
by Ed Devlin, Michael Kim of PIMCO, 9/30/13
Passive investment returns in the Canadian corporate bond market have been unimpressive because of the way corporate bond indices are constructed and factors unique to the Canadian market. Unconstrained by these limitations, active managers with global reach may provide superior returns. The current environment presents an attractive opportunity for Canadian investors to implement a wide discretion, active approach to managing corporate bonds.

Canadian Secular View: Into Darkness?
by Ed Devlin of PIMCO, 7/17/13
Many investors are buying Canadian federal government bonds, shorting Canadian bank stocks and selling Canadian dollars in anticipation of a prolonged downturn. While significant risks are clearly facing the Canadian economy, our baseline forecast does not justify positioning our portfolios for a prolonged Canadian downturn.

The Bank of Canada Has Barked, But Will It Bite?
by Ed Devlin and Richard Clarida of PIMCO, 12/1/12
As Canadian consumers have increased their mortgage debt and bid up housing prices, the potential for a disorderly unwinding of these imbalances rightly concerns the Bank of Canada. PIMCO believes that the banks next policy move will be to raise interest rates, but with the traditional aim of fighting inflation rather than reducing home prices and consumer debt. We expect the Bank of Canada to continue tightening mortgage credit and using moral suasion to damp the housing boom and discourage consumers from taking on more debt.

PIMCO
by Ed Devlin of PIMCO, 2/23/12
Given the bimodal nature of the expected distribution of outcomes, it is important for investors to remain nimble so they can respond to high frequency data and global public policy developments. We expect the Bank of Canada to remain in wait-and-see mode until it is clear which way the economy is tipping. In our base case scenario, we estimate Canadian bond market returns in the range of 2%-4%, and if we tip into a virtuous cycle of economic recovery, we anticipate the possibility of negative absolute returns.
18 results found.