The BOC had hinted it may remove forward guidance but without saying ‘neutral’ the statement still indicates no bias toward hiking or cutting:

  • “The Bank judges that the risks to its inflation projection are roughly balanced”
  • Inflation is close to 2% target
  • Core inflation rose more rapidly than expected, mainly reflecting sector-specific factors
  • CPI is evolving largely as expected, underlying inflation pressures are muted
  • Global growth profile is weaker than in July
  • The US economy is gaining traction despite weakness elsewhere
  • Canadian exports have begun to rebound but business investment remains weak
  • Expects economy to reach full capacity in H2 2016 (from mid-2016)
  • Canadian dollar depreciation adding about 0.1-0.3 pp to core inflation, 0.3-0.5 pp to total

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