|

Canada: Carney majority prospects and fiscal outlook – TD Securities

TD Securities strategists discuss Canadian by-elections in three federal ridings and notes that Prime Minister Carney’s Liberals are close to securing a majority in Parliament. They highlight that a slim Liberal majority is unlikely to alter the near-term fiscal outlook materially, but it would strengthen Carney’s mandate and lower the probability of a snap election in 2026.

Carney majority seen with limited fiscal impact

"PM Carney is sitting on the cusp of a majority government ahead of Monday's by-elections, which will take place in 3 federal ridings across Ontario and Quebec."

"Carney's Liberals command 171 of 343 seats in the House of Commons after recent defections from the opposition, and poll aggregators show a sizable lead for the Liberals in University—Rosedale and Scarborough Southwest which should land them a majority in Parliament."

"We do not expect a slim Liberal majority to have significant impacts on the near-term fiscal outlook; the Liberal government was able to pass its last budget without much difficulty, and majority governments don't always translate to less fiscal restraint."

"However, Carney should have a stronger mandate coming out of these by-elections which reduces the likelihood of a snap election in 2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

More from FXStreet Insights Team
Share:

Editor's Picks

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

Japanese Yen struggles to gather strength as BoJ maintains status quo

USD/JPY trades marginally lower on the day at around 157.50 after the Bank of Japan (BoJ) decided to leave monetary policy settings unchanged at the October meeting. In the post-meeting press conference, BoJ Governor Ueda reiterated that they will continue to raise the policy rate and adjust the degree of monetary easing in reponse to economic activity and prices.

Gold slides below $4,000 as Fed rate hike bets offset falling bond yields and weak USD

Gold attracts some follow-through selling for the second straight day and slides below the $4,000 psychological mark during the Asian session on Friday amid hawkish US Federal Reserve expectations. In fact, US macro data released on Thursday pointed to resilient economic growth and persistent price pressures, solidifying bets for an imminent rate hike in December. This is seen as undermining the non-yielding bullion.

The hawkish Fed can't lift the US Dollar anymore
About three more Federal Reserve hikes are already priced in, and the central banks behind the Euro, Pound, Yen and Loonie are raising rates or about to. That leaves the US Dollar Index with little to gain if the Fed keeps leaning toward higher rates.
Binance hack puts crypto exchange custody risk back in focus
Binance is investigating a major security incident after billions of dollars in crypto assets moved from wallets associated with the exchange. The final scale of the incident remains unclear.
A hot US economy is supposed to sink Gold. It didn't. Here's why
Gold (XAU/USD) remains under pressure near $4,000, as stronger-than-expected United States (US) economic data reinforce expectations of another Federal Reserve (Fed) interest rate hike in December. Economic growth is accelerating, inflation remains elevated, and borrowing costs could rise further.