Bank of America Merrill Lynch: Canada's wage growth slows in April, rate cut likely in June

Bank of America Merrill Lynch sees Canadian wage growth slowing in April, making a June rate cut still possible, even with a strong labor report. A surprising 90,400 new jobs were added and the unemployment rate held steady at 6.1% versus Bank of America Merrill Lynch's expectation of 6.2%. Growth was driven primarily by part-time employment and the service sector.

The agency noted that slower hourly wage growth and the fact that core inflation continues to fall make a rate cut in July more likely and leaves the door open for the first rate cut in June. If the April CPI core inflation rate released on May 21st performs well, it will likely clear the way for a June rate cut.