Bank of Canada policy statement "was more dovish than expected"

Author: Eamonn Sheridan | Category: Central Banks

The BoC monetary policy statement was on Wednesday. For summaries:

RBC Economics with their take:
  • policy statement was more dovish than expected
  • BoC didn't move explicitly to an easing bias (unlike the Fed and ECB) but sounded more concerned about "persistent trade tensions" that are clouding the outlook
  • still don't appear to be in any rush to lower rates alongside the Fed (Powell's comments this morning reinforced expectations for a July cut) but markets seem justified in thinking the BoC's next move is more likely to be down than up
  • Concerns about trade tensions and slowing global growth received top billing in the statement, unlike in May when signs of a firming domestic economy were highlighted
  • Inflation remains close to 2% (something the Fed and ECB can't claim) and is expected to be sustained at the BoC's target by the middle of next year as economic slack is absorbed

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